No way! Holy shit! so like the 1930's crash it could wind up being people pensions etc holding this bundled crap. What other kinds of institutions might take the hit? What about public corporations? or will it mostly be Joe investor who gets screwed?
So if the economy takes a 300 billion hit might this not start a cascade effect? and when does recovery start (if possible) will these banks etc have to pro-rate the hit over several years before they feel comofotable lending again? what starts the upward movement again?
Do you personally think this is going to be the beginning of the end with in the next year or two?
PeakOil is You
THE S*** Hits the Fan (TSHTF) Thread (merged)
Re: We probably have less than 12-to-18 months before TSHTF
by uNkNowN ElEmEnt » Fri 21 Dec 2007, 10:26:10
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Re: We probably have less than 12-to-18 months before TSHTF
by gg3 » Fri 21 Dec 2007, 11:05:00
Hypothesis 1: This topic was started two or three years ago and the predictions didn't come true.
Result: Fail. This topic was started in May 2007, so it would appear that June through November 2008 is the range of target times.
Hypothesis 2: The Republicans will use their stockpiled duct tape on the economy just long enough to let the next (Democratic) president get splattered with shit when it finally hits the fan.
Result: Pending.
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I would be wary of those financial-insider webpages, particularly where the author appears to have an ideological axe to grind.
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As for lending getting tight, you can protect yourself by not going (further) into debt (and paying down whatever debt you have).
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No one said this was going to be easy. We're still on track for a dieoff to the tune of 60% or more of the human population on Earth. Be glad if you're not one of the ones who gets to die off.
And vanquish those dreams of becoming a feudal lord. Everyone wants to be the duke* and no one wants to be the dustman*, but dukes are dispensible and dustmen are essential.
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*Duke: UK English for a type of minor nobleman. Generally used for the socio-economic category of individuals who obtain excessively comfortable livings via their heredetary connections, while doing relatively little or nothing in the way of actual productive work.
*Dustman: UK English for refuse collection worker. Generally used for the category of jobs that require heavy physical labor, outdoors, even when the weather is miserable, and without the social status that should properly accrue to people who provide essential services.
Result: Fail. This topic was started in May 2007, so it would appear that June through November 2008 is the range of target times.
Hypothesis 2: The Republicans will use their stockpiled duct tape on the economy just long enough to let the next (Democratic) president get splattered with shit when it finally hits the fan.
Result: Pending.
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I would be wary of those financial-insider webpages, particularly where the author appears to have an ideological axe to grind.
---
As for lending getting tight, you can protect yourself by not going (further) into debt (and paying down whatever debt you have).
---
No one said this was going to be easy. We're still on track for a dieoff to the tune of 60% or more of the human population on Earth. Be glad if you're not one of the ones who gets to die off.
And vanquish those dreams of becoming a feudal lord. Everyone wants to be the duke* and no one wants to be the dustman*, but dukes are dispensible and dustmen are essential.
---
*Duke: UK English for a type of minor nobleman. Generally used for the socio-economic category of individuals who obtain excessively comfortable livings via their heredetary connections, while doing relatively little or nothing in the way of actual productive work.
*Dustman: UK English for refuse collection worker. Generally used for the category of jobs that require heavy physical labor, outdoors, even when the weather is miserable, and without the social status that should properly accrue to people who provide essential services.
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Re: We probably have less than 12-to-18 months before TSHTF
by threadbear » Fri 21 Dec 2007, 22:34:36
redundant
Last edited by threadbear on Sat 22 Dec 2007, 16:03:53, edited 1 time in total.
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Re: We probably have less than 12-to-18 months before TSHTF
by threadbear » Fri 21 Dec 2007, 22:35:54
$this->bbcode_second_pass_quote('uNkNowN ElEmEnt', 'N')o way! Holy shit! so like the 1930's crash it could wind up being people pensions etc holding this bundled crap. What other kinds of institutions might take the hit? What about public corporations? or will it mostly be Joe investor who gets screwed?
So if the economy takes a 300 billion hit might this not start a cascade effect? and when does recovery start (if possible) will these banks etc have to pro-rate the hit over several years before they feel comofotable lending again? what starts the upward movement again?
Do you personally think this is going to be the beginning of the end with in the next year or two?
So if the economy takes a 300 billion hit might this not start a cascade effect? and when does recovery start (if possible) will these banks etc have to pro-rate the hit over several years before they feel comofotable lending again? what starts the upward movement again?
Do you personally think this is going to be the beginning of the end with in the next year or two?
I love your, "oh my God" moment. Isn't it a mind blower? I had that moment, about 7 years ago, about the same issue, and can't take my eyes off it, it's like a bad traffic accident. It's finally starting to play out, and I turn out not to be crazy and overly obsessed after all. Though, in some ways, I would have preferred discovering I was an obsessive. If that was the case, I could have just dropped some Prozac for awhile instead of rearranging my entire life, around this knowledge.
I think Mr.Bill is assuming you live in the U.S. though, where the general economy's exposure to worthless commercial paper is very high.
In Canada, our system of rules and regulations has kept the banks from engaging in as risky lending practices. There will be some pain, with regard to structured finance, here, but I think that our pensions are probably safe. And I also assume our money is safe in Canadian banks if our accounts are cdic insured.
Canada's main problem will be it's dependency on the U.S as it's number one customer. I think something like 40% of our economy is reliant on exporting to them. We will likely be hit with a wave of unemployment we haven't seen since the depression. Also, the central banks keep lowering interest rates to steady the Canadian dollar against the American dollar, in an attempt to keep it as weak or weaker than A.dollar. This is a recipe for disaster, in terms of inflating prices of everyday items.
Perhaps Mr.Bill can peruse what I've written and correct any glaring mistakes.
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Re: We probably have less than 12-to-18 months before TSHTF
by threadbear » Fri 21 Dec 2007, 22:43:22
GG3, I would read Mr. Bill's post pretty carefully. He is pretty conservative and understands banking. If he's worried, so should everyone be. The chances of a severe economic downturn are so much greater than an actual major "die off", they cannot be compared.
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Re: We probably have less than 12-to-18 months before TSHTF
by LoneSnark » Sat 22 Dec 2007, 12:11:53
$this->bbcode_second_pass_quote('', ' ')So if the economy takes a 300 billion hit might this not start a cascade effect? and when does recovery start (if possible) will these banks etc have to pro-rate the hit over several years before they feel comofotable lending again? what starts the upward movement again?
Simple, just like the 1930s, upward movement begins once downward movement has stopped. Specifically, there are only so many banks in the world; the absolute bottom of the worst-case economic collapse would be if all of them failed.
After all the banks that are going to fail have failed, people will begin setting up new ones, and upward movement would begin anew. Historically, this process takes between one and seven years.
Of course, as any monetarist will tell you, this pre-supposes that the government has not stepped in to artifically slow the collapse (1990s Japan) and that the government has not taken the opportunity to impose regime uncertainty (1930s America). If it has then recovery may take decades.
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Re: We probably have less than 12-to-18 months before TSHTF
by MrBill » Mon 24 Dec 2007, 10:59:16
$this->bbcode_second_pass_quote('uNkNowN ElEmEnt', 'N')o way! Holy shit! so like the 1930's crash it could wind up being people pensions etc holding this bundled crap. What other kinds of institutions might take the hit? What about public corporations? or will it mostly be Joe investor who gets screwed?
So if the economy takes a 300 billion hit might this not start a cascade effect? and when does recovery start (if possible) will these banks etc have to pro-rate the hit over several years before they feel comofotable lending again? what starts the upward movement again?
Do you personally think this is going to be the beginning of the end with in the next year or two?
So if the economy takes a 300 billion hit might this not start a cascade effect? and when does recovery start (if possible) will these banks etc have to pro-rate the hit over several years before they feel comofotable lending again? what starts the upward movement again?
Do you personally think this is going to be the beginning of the end with in the next year or two?
Threadbear I think that Canada is as exposed as everyone else. I cannot speak about Canadian banking sheets because I have not spent anytime there, but Canadian banks do have operations in the USA, and invest in the same type of products. Their year-end was at the end of October, so we should see their financial results sooner. Then we will know what kind of subprime or CDO exposure they had on their books.
But it is important to realize that deposit insurance does not cover investments, only deposits. So the pension companies are not insured. Only individual investors. There are not many 'Canadian only' pension or mutual funds. Most are cross-border investors. Therefore, I would expect the same type of investment strategies as we have also seen in European banks in response to low volatility, low interest rates and a flat-yield curve.
That is what I mean by the structure of the balance sheet through a corporate finance lens. Banks, mutual funds and pension funds all have to take risk to earn above average returns. Those risks are interest rate risks, currency risks and in some cases credit risks. No risk, no reward. The truth is that since the meltdown in the dotcom bubble that these funds were taking on more risks to cover the gaps between their current assets and their forward liabilities (i.e. when you retire).
Secondly, as everyone knows, through NAFTA Canada has become more dependent on exports, and therefore growth in the USA than ever. That is good. But one a stronger Canadian dollar hurts manufacturing exports from central Canada, and secondly weak US growth has a knock-on effect on exports of softwood lumber and other cyclical exports. True, oil & gas as well as commodities might be high at the moment due to strong prices, but that effects western Canada and NFL disproportionately at the expense of central and eastern Canada. Something we euphemistically call 'the Dutch Disease'.
In a global economy the links are strong. However, it is more like a matrix, so when you tug on one end it effects direct links more strongly than others farther away. However, the whole net does move.
The recovery, if there is one, starts crucially with the policy response. I won't be bothered going into those. Let us just say there is pain and there are short-term remedies that lead to more pain later. Take your pick?
The organized state is a wonderful invention whereby everyone can live at someone else's expense.
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Re: We probably have less than 12-to-18 months before TSHTF
by gg3 » Tue 25 Dec 2007, 00:55:36
.
Threadbear, I'm not pooh-poohing* Mr. Bill, who's clearly something of an expert in the field. (What gave you that idea?)
Where I am (San Francisco Bay Area) the economy started going down the drain about the middle of the year, right around the time the mortgage crisis took down its first major financial institution. Since I earn my living designing & installing PBXs (business telephone systems), I noticed it "real fast."
I'm an engineer and make no pretense of being an expert in finance, as distinct from small business economics as needed to manage my own affairs.
Some of my friends & members of our sustainable community group, have decent expertise in finance, so I take their advice in this area.
Yes we are all in agreement that the poo is hitting the propeller.
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*"Pooh pooh" = to downplay something, as per Winnie the Pooh, "Oh Pooh, don't be silly." That's the proper spelling for that purpose. The spelling "poo poo" is a euphemism for feces.
Threadbear, I'm not pooh-poohing* Mr. Bill, who's clearly something of an expert in the field. (What gave you that idea?)
Where I am (San Francisco Bay Area) the economy started going down the drain about the middle of the year, right around the time the mortgage crisis took down its first major financial institution. Since I earn my living designing & installing PBXs (business telephone systems), I noticed it "real fast."
I'm an engineer and make no pretense of being an expert in finance, as distinct from small business economics as needed to manage my own affairs.
Some of my friends & members of our sustainable community group, have decent expertise in finance, so I take their advice in this area.
Yes we are all in agreement that the poo is hitting the propeller.
---
*"Pooh pooh" = to downplay something, as per Winnie the Pooh, "Oh Pooh, don't be silly." That's the proper spelling for that purpose. The spelling "poo poo" is a euphemism for feces.
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Re: We probably have less than 12-to-18 months before TSHTF
by uNkNowN ElEmEnt » Tue 25 Dec 2007, 05:16:37
Thank you for answering my questions. Do you think our governments will act as dramatically as they need to, to stave off a crash? If these things are so easily understood by those in the business how could they have let us get in this mess in the first place?
Do you think this is a managed crash? It appears (from my extrememly limited understanding) that either TPTB are in denial, or really believe that growth can be infinte. Does it take a slightly doomerish perspective to see what is coming down the pike?
Do you think this is a managed crash? It appears (from my extrememly limited understanding) that either TPTB are in denial, or really believe that growth can be infinte. Does it take a slightly doomerish perspective to see what is coming down the pike?
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Re: We probably have less than 12-to-18 months before TSHTF
by MrBill » Tue 25 Dec 2007, 05:57:16
$this->bbcode_second_pass_quote('uNkNowN ElEmEnt', 'T')hank you for answering my questions. Do you think our governments will act as dramatically as they need to, to stave off a crash? If these things are so easily understood by those in the business how could they have let us get in this mess in the first place?
Do you think this is a managed crash? It appears (from my extrememly limited understanding) that either TPTB are in denial, or really believe that growth can be infinte. Does it take a slightly doomerish perspective to see what is coming down the pike?
Do you think this is a managed crash? It appears (from my extrememly limited understanding) that either TPTB are in denial, or really believe that growth can be infinte. Does it take a slightly doomerish perspective to see what is coming down the pike?
No, I do not believe TPTB can or will act fast enough to stave-off any long-emergency much less a crash. This is a slow motion train wreck that has been in motion for a long-time.
Look at the front contenders to be the next US President. Arguably the most important job in the world and look at the jokers jockying for that position?
$this->bbcode_second_pass_quote('', ' ')
Oh, and while the king was looking down,
The jester stole his thorny crown.
The courtroom was adjourned;
No verdict was returned.
And while lennon read a book of marx,
The quartet practiced in the park,
And we sang dirges in the dark
The day the music died.
The sad thing is one of them will actually win the next election. A two party power sharing state instead of a multi-power true democracy. What do you expect? That Hillary is going to find the political courage to do what needs to be done?
No one even listens to the Comptroller General of the United States when he warns that the US is near bankruptcy much less lesser mortals like economists.
The left believes that economics does not matter, and the right selectively uses pseudo-economic arguments to justify interference in the economy out of political expediency. And voters just want something for nothing. While Business arbitrages between political La-La Land and what is going on in the real economy.
It is really no mystery why there is an extreme wealth concentration in the economy. In a market economy with a democracy every econoimic and political decision matters, and the majority are too dumb or too lazy, so the best and brightest cannot help but rising to the top. And so it goes!
See you on the other side of peak! ; - )
The organized state is a wonderful invention whereby everyone can live at someone else's expense.
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