[Valdemar]

$this->bbcode_second_pass_quote('Global Research (In Canadia, eh)', '[')b]It’s Official: The Crash of the U.S. Economy has begun

by Richard C. Cook

Global Research, June 14, 2007

It’s official. Mark your calendars. The crash of the U.S. economy has begun. It was announced the morning of Wednesday, June 13, 2007, by economic writers Steven Pearlstein and Robert Samuelson in the pages of the Washington Post, one of the foremost house organs of the U.S. monetary elite.

(continued at link)

[Heineken]

Would a 401(k) that is invested in cash (just an interest-earning "guaranteed" option), not stocks, be safe? Or is that a "chip" that should be cashed in too, and converted to physical assets?

[undertaker]

I sure friggin' hope so. It's time for arrogance and ignorance to get smacked HARD!

[birchm]

If that's the case, then why are we on day 3 of an awesome stock market rally, eh?

[napoleon]

$this->bbcode_second_pass_quote('birchm', 'I')f that's the case, then why are we on day 3 of an awesome stock market rally, eh?

[firestarter]

$this->bbcode_second_pass_quote('birchm', 'I')f that's the case, then why are we on day 3 of an awesome stock market rally, eh?

[dhfenton]

I followed the link, and read the whole article. I found several of their statements to be foolish, and dead wrong. The bottom line is that the guy on the street who isn't out doing speculative real estate dealings, and has a decent mix in his 401K isn't going to get stung. This is the tech bubble all over again. But this time the guys who get stung are going to be the house flippers, and real estate speculators. The guy who has a fixed rate mortgage on his home isn't going to feel a thing. The other guys who are getting stung may be the ultra rich participants in leveraged buy-outs. I really don't have much sympathy for them either. Once again the markets and these niche get rich quick schemes do not reflect the overall health of the economy. Energy prices will have a much greater effect than what these guys are talking about. Fortunately, you can choose to use less energy. Those who adapt the fastest and best will be fine; those who insist on driving huge pick-ups and heating their homes to 72+ in the winter and cooling to 70 or less in the summer will suffer.

[AQIUS]

Ironic that this topic has surfaced. I had the same thought yesterday but for a somewhat specific reason;
Bears Sterns refusal to redeem investors demand for cashing out of a speculative hedge fund.
My thought is that if a major wall street firm refuses to honor long-held good faith agreements, then it's a fast downhill run from here.
Bear Sterns reason for not redeeming investors shares?
"Not enough money available" they said.

Doesnt get any simpler than that to me.

[seahorse2]

The "news" warnings about a crash come so often they're boring, but recently, what's interesting are things like Morgan Stanley advising all their clients to get out, the Clintons apparently liquidating for b.s. reasons, and now this hedge fund not allowing people out bc of lack of money. These are actions, not words, or, the rubber hitting the road as the saying goes. These latest events are certainly some manifestation of concern or fear by the market players themselves.

Morgan Stanley Sell Order

Clintons' liquidate See PO topic on this to see its bs to liquidate a blind trust due to conflict reasons??

[mlit]

It usually does best right before the storm. As those that know it's time to get out do everything they can to pull more in and cover their exit.

[evilgenius]

Could be the markets are about to 'spin the wheel', just like the trooping of the guard for the queen's birthday.

[Mircea]

$this->bbcode_second_pass_quote('ElijahJones', '')$this->bbcode_second_pass_quote('birchm', 'I')f that's the case, then why are we on day 3 of an awesome stock market rally, eh?

[TreebeardsUncle]

Well, stock prices can be viewed as the present perceived value of future earnings. Note that oil service companies are particularly undervalued relative to their future earnings, particularly a lot of the drilling rig companies, which have PEs on the order of 10 and forward PEs even lower than their current ones. They have been doing quite well lately too, in terms of stock price appreciation. For example, Hemerich & Payne, which rents out rigs for both land and offshore drilling has seen its stock price appreciate at least 32% or so since the time I bought into it last November. Figure one can do well buying into the oil rig leasing companies late each winter or early spring and then holding them through most of each summer for the next decade at least. It will be quite a few years, if ever, before the traders on Wall Street realize that the oil price is on an upward ramp not a short-term upswing in a generally oscillatory pattern.
In particular, I believe Transocean (RIG) is the best performer of the drillers as its stock price has come up about 16% since the end of April (when I bought into it). The fact that Transocean is primarily engaged in deep water drilling and is doing better than Noble, which speciallizes in drilling in shallower waters, indicates that near-shore oil reserves are already quite depleted.

g

[Fiddlerdave]

Thoughts of a normal contraction and rebuild of the economy would be more realistic if it were not that most of the current stock boom has been due to increased profits from disassembling and transferring the US corporate and industrial infrastructure to low-cost foriegn countries, factories, support, billing , everything, and heavy deficit defense spending.

Neglecting the need for consumers to make a living brings a nice profit bulge to boost the stock market without any improvement in the fundamentals of economic health. The dollar drop, housing price drop (just about to move beyond the fiction of highly incentivised sales price props) and energy price increases in combination will bring a very steep slope of decline for the next phase of economic reality, and we have sqaundered the fundamentals that will slow the fall and give it a reasonable bottom.

[lateStarter]

FiddlerDave - nice, pithy summation of where we find the US today. It is unfortunate however that 99.99% of the US population, while vaguely uneasy about things, has no clue as to what is about to happen. It will not be pretty. Hope you are planning accordingly.

[eXpat]

In the US econmy it seems to be that all what the Federal Reserve Chairman Ben Bernanke can hope for is a“soft landing” link.

$this->bbcode_second_pass_quote('', 'A')mid claims that Federal Reserve Chairman Ben Bernanke has engineered a “soft landing” by holding interest rates steady after the downturn of the housing market, he told the Senate Banking Committee on February 14, “The current stance of policy is likely to foster sustainable economic growth and a gradual ebbing of core inflation.” But the sense of middle class voters that their standard of living is on a slippery slope downward was a factor in the Democrats’ regaining control of Congress last November. This sense is not going away, because it’s the result of trends over the last decade. Bernanke said nothing to the Senate on February 14 or to a House committee the next day to allay these concerns.

[manu]

Nothing left for them to do then except attack Iran and Syria.

[manu]

Nothing left for them to do then except attack Iran and Syria.