[alecifel]

It's time to introduce a new buzzword for these desperate acts by Bernanke's Brain Trust. "Fiscal Incontinence". Every rate cut and cash transfusion is just another piece of FedLax going into the bowels of the economy.

Perhaps, once the Fed has run out of room for rate cuts, they'll make the prime rate a negative and actually pay people to take the money! Perhaps then we'll be able to borrow our way out of this massive debt.

The IMF is right to warn people, although that doesn't help much. It's a lot like Citigroup getting their credit downgraded. In the end, this is going to push the dollar even lower. How much will it have to lose before OPEC nations start valuing oil based on a basket?

If global oil production keeps dropping, or more importantly, if our tank farms here in Cushing keep filling with more air, that could be the fart that fills the trousers. Yet we have ass-clowns like Lynch saying that these are all signs of a pending economic boom. (Increasing demand for oil, new payroll figures, increase in equipment orders, etc.) Yes, Michael -- it's a coming "boom" alright, but you'd better have an umbrella handy for the fallout.

Sometimes businesses add jobs and buy equipment ahead of an inflationary period, so that they can lock in wages/prices and thereby maximize the use of their cash before costs go up. So these can also be symptoms of an expected downturn.

[BillPeakOil]

CNN:Money

You know its bad if the IMF is saying this:

"The financial crisis which started in the United States is more serious and more global than it was a few weeks ago," IMF Chief Dominique Strauss-Kahn said in Paris."

[edit - shortened link - markl]

[NeoPeasant]

Is it just me, or is CNN burying this in a sub-page that few are likely to see?

[Last_Laff]

It is just you if you didn't click on See All Latest News link...

[JFT]

$this->bbcode_second_pass_quote('NeoPeasant', 'I')s it just me, or is CNN burying this in a sub-page that few are likely to see?

[BillPeakOil]

Yeah, I agree with JFT. It seems that prices aren't dropping as much as you would think they should today.

[mark]

Plunge Protection Team at work.

[Art_Vandelai]

THe whole thing was a mass psychological operation by the Fed.

Recall last week, when all the talk was of a 100 bp decrease in the Fed funds rate, and completely negative sentiment.

Let's invent a crisis, demonstrate that we've turned it around and
change the market sentiment.

I'd wager that JP Morgan, in return for their little "gift" of Bear Stearns, was in there buying big-time at the close on Monday to turn the Dow positive for Monday close.

Just in time for the fed to underwhelm the market with a 75 bp cut. Instead of seeing that as a negative, the traders think it's positive because the Fed is not looking as concerned as was feared. All spurred on by "fed-friendly" buyers supporting the rally. Commodities and gold get sold off to make it look like the tide is turning and selling is the only option (preceded by friendly stories reinforcing the fact that commodities and gold are at all-time highs and could fall a long way).

The whole economy is built on "confidence" right now. Without it, that house of cards built on future earnings that haven't arrived yet comes tumbling down.

These folks are masters of psychology. Don't fight the Fed. They've engineered a whole year's worth of gains in just a day and a half. Plus they've managed to save a bullet for later. Is it worth losing Bear? Certainly the market cap created between 3 and 4pm today in the bank/brokerage index makes the Bear losses look like small change.

[Kaj]

It certainly is global.
From the uk:

http://www.guardian.co.uk/business/2008 ... ketturmoil

$this->bbcode_second_pass_quote('', ' ')The credit crunch is scary, as scary as these things get. It is also business as usual, because markets always over-correct - they go too far on the way up, and too far on the way down. Depending on how you count, this is either the fourth of fifth near-disaster of my lifetime in the workforce, and each of these episodes has had a different trajectory and offered a different lesson.

[Ferretlover]

$this->bbcode_second_pass_quote('Art_Vandelai', 'J')ust in time for the fed to underwhelm the market with a 75 bp cut. Instead of seeing that as a negative, the traders think it's positive because the Fed is not looking as concerned as was feared.

[threadbear]

I'm just reading about Japan's experience during the "lost decade" which pretty closely mirrors what the U.S will go through. They had an asset price collapse, but I don't think retail prices fell all that much. I'd like to get more information on that. They SHOULD have fallen. Commodity prices weren't that high, so you'd think that they would have been overwhelmed by cheap exports. The only way it makes sense is if they had several large corporations that anchored the economy, that were impervious to competition...and indeed, they did, the car manufacturers, Toyota, Honda and companies like Sony....and yes, they also had trade policies which protected their anchor corporations.

It's all a big so what?...unless you compare and contrast with the U.S, how they might respond to a potential domestic deflationary price spiral in goods and merchandise. I see a wave of protectionism coming that could revitalize Detroit automakers and revitalize domestic manufacturing.

Thoughts?

[efarmer]

That is a interesting idea threadbear. One of the things I am aware
of in Detroit, Ohio, Pennsylvania, and all around the manufacturing
core of the country is how much supporting basic materials processing
and subassembly level processing has been dismantled underneath the layer of final assembly at high labor rate manufacturing that is left. In such economic conditions I wonder if we would have to gut military
spending and apply it to rebuilding our manufacturing base to
pull such a contraction back into our own capabilities off.

To date the end of life kicker for our empire is offensive military
based. The big fear sales pitch is that we can't ever stop our
military occupation and send it home without all of our enemies
following us back to get even. I predict we are going to find out
soon based on choice or necessity.

[uNkNowN ElEmEnt]

I doubt it, people aren't buying big cars because of the price of gas. unless they start selling smarter, more fuel efficient modes of transportation, nothing is gonna save their bacon.

[threadbear]

$this->bbcode_second_pass_quote('uNkNowN ElEmEnt', 'I') doubt it, people aren't buying big cars because of the price of gas. unless they start selling smarter, more fuel efficient modes of transportation, nothing is gonna save their bacon.

[MrBill]

$this->bbcode_second_pass_quote('threadbear', 'I')'m just reading about Japan's experience during the "lost decade" which pretty closely mirrors what the U.S will go through. They had an asset price collapse, but I don't think retail prices fell all that much. I'd like to get more information on that. They SHOULD have fallen. Commodity prices weren't that high, so you'd think that they would have been overwhelmed by cheap exports. The only way it makes sense is if they had several large corporations that anchored the economy, that were impervious to competition...and indeed, they did, the car manufacturers, Toyota, Honda and companies like Sony....and yes, they also had trade policies which protected their anchor corporations.

It's all a big so what?...unless you compare and contrast with the U.S, how they might respond to a potential domestic deflationary price spiral in goods and merchandise. I see a wave of protectionism coming that could revitalize Detroit automakers and revitalize domestic manufacturing.

Thoughts?

[threadbear]

Mr.Bill, Why would Japan want to break out of it's Matrix? The article is writtenas if it's the job of the govt is to attract foreign investment, regardless of the further displacement and distortions that could cause.

Japan did the only thing it could do, during it's particular economic crisis, which was to erect trade barriers. Had they not, what on earth would have happened to that country in the 90's?

[MrBill]

$this->bbcode_second_pass_quote('threadbear', 'M')r.Bill, Why would Japan want to break out of it's Matrix? The article is writtenas if it's the job of the govt is to attract foreign investment, regardless of the further displacement and distortions that could cause.

Japan did the only thing it could do, during it's particular economic crisis, which was to erect trade barriers. Had they not, what on earth would have happened to that country in the 90's?

[threadbear]

$this->bbcode_second_pass_quote('MrBill', ' ') That means that one CB acting alone cannot really act to contain global inflation, only the way that it transmits itself into the domestic economy.

[Gerben]

$this->bbcode_second_pass_quote('threadbear', 'I') understand all the arguments about how erecting trade barriers appears superficially appealing, but in the end, can hurt domestic economies. However, in the case of the U.S, at this point in time, I can't see how erecting a few trade barriers is going to do anything but help them. It won't do a thing to bring prices down, but it could certainly help by repatriating at least some of the outsourced jobs, retaining the ones they have, and hopefully put an end to IT jobs flowing out of the country while IT workers from India, flood in.

[threadbear]

$this->bbcode_second_pass_quote('Gerben', '')$this->bbcode_second_pass_quote('threadbear', 'I') understand all the arguments about how erecting trade barriers appears superficially appealing, but in the end, can hurt domestic economies. However, in the case of the U.S, at this point in time, I can't see how erecting a few trade barriers is going to do anything but help them. It won't do a thing to bring prices down, but it could certainly help by repatriating at least some of the outsourced jobs, retaining the ones they have, and hopefully put an end to IT jobs flowing out of the country while IT workers from India, flood in.