A coming recession?

[Ian]

From everything I'm hearing, it's a good idea to pull money out of the stock market now.

Warren Buffet believes otherwise: http://www.futuresmag.com/2012/10/25/wa ... financials

[Coito ergo sum]

From everything I'm hearing, it's a good idea to pull money out of the stock market now.

Warren Buffet believes otherwise: http://www.futuresmag.com/2012/10/25/wa ... financials

That's the trouble with these economic predictions. There are always folks on both sides of the ball.

And, I am reticent to follow dramatic warnings, because I tend to think that if news of "get out of stocks" is coming out now, it means the news is already late, and what the manipulators want us to do is sell, so they can buy.

It is a very complex web of lies. LOL

[amused]

You know, Paul, Reagan proved that deficits don't matter. We won the mid-term elections, this is our due.

Dick Cheney to Paul O'Neill, then Treasury Secretary

http://en.wikiquote.org/wiki/Dick_Cheney

He's kinda known for that quote.

So?

Was he right?

Who knows?

In a global economy it may be that deficits don't matter. We borrow from China so we can buy Chinese stuff so China can invest in making stuff to sell, and round and round. To the banks it probably doesn't matter who owes who since they're on both sides.

[Coito ergo sum]

Accordingly, Buffett is a big believer in stocks, though he noted that October 2008 was a better time to buy than now. Yet investors have to look ahead. Said Buffett: “This is a better time [to buy stocks] than 10 years from now will be.”

Buffett also believes it’s a great time to buy a home. “I’d finance it with a 30-year mortgage, and it’s a terrific deal,” he said.

http://michaelsincere.com/articles/3-ar ... rs-of-doom

So, we pays our money and we takes our chances. I bought a house this year, and I'm still in stocks.

I hope the Oracle is right.

[Coito ergo sum]

You know, Paul, Reagan proved that deficits don't matter. We won the mid-term elections, this is our due.

Dick Cheney to Paul O'Neill, then Treasury Secretary

http://en.wikiquote.org/wiki/Dick_Cheney

He's kinda known for that quote.

So?

Was he right?

Who knows?

In a global economy it may be that deficits don't matter. We borrow from China so we can buy Chinese stuff so China can invest in making stuff to sell, and round and round. To the banks it probably doesn't matter who owes who since they're on both sides.

What, then, was your point in posting it?

[amused]

That going deeper into debt to prime the economy may not be such a bad idea, since deficits don't matter.

[Ian]

That going deeper into debt to prime the economy may not be such a bad idea, since deficits don't matter.

You mean Keynsian economics actually works?!?!

[amused]

Keeping in mind that I'm an architect, and have a vested interest, I think real estate bubbles are just fine. It's a great way to pump a lot of money into the widest possible demographic, from construction laborers to mortgage bankers and everybody in between. Wall Street and government work together to pump the economy, and new construction is the easiest way to do it. We just need to be building stuff that's actually useful long term.

[Coito ergo sum]

That going deeper into debt to prime the economy may not be such a bad idea, since deficits don't matter.

So, you weren't being sarcastic?

[amused]

That going deeper into debt to prime the economy may not be such a bad idea, since deficits don't matter.

So, you weren't being sarcastic?

Well, maybe a little since it WAS a rather prominent Republican who said that deficits don't matter, when the Republicans/Tea Party are now insisting that the deficit IS a problem.

[Coito ergo sum]

That going deeper into debt to prime the economy may not be such a bad idea, since deficits don't matter.

You mean Keynsian economics actually works?!?!

To some extent, it does.

But, there are limits, and there are downsides.

Monetarism actually works.

[Ian]

Slavery works too. Just thought I'd mention it.

[laklak]

From everything I'm hearing, it's a good idea to pull money out of the stock market now.

Depends on what you're looking for. I'm going to see my financial babe the week after Thanksgiving, she's got some stuff she thinks might do better than "negative growth" (what a great euphemism). That's pretty much what we're faced with now, a good investment is one that doesn't decrease in value. There are a few mutual funds she wants me to look at. Take a look at these if you've got any spare cash.

MOO (Agriculture), FPHAX (Pharm.), VGENX (Energy), SDY (Dividends)

The last is problematic because it's an income fund and if dividend tax rates rise to income tax marginal rates like Obama wants then it isn't worth it. I have to buy some of the first simply because my pit bull's nickname is "Moo", it must be a sign from Gawd.

Australian bonds used to be a good deal, they were paying over 5%, but now they're at around 4 and they're in such demand that they're charging a 4% premium. So basically it's a place to earn 0%, just a place to park money. Unless, of course, the Aussies don't do anything stupid and the Fed keeps printing paper, in that case the USD should keep dropping against the AUD and you'll do OK. If you'd bought AUD in 2009 you'd have made over 40% in USD terms now, not a bad investment. That's how I'm paying for the house renovation.

There are people out there who are going to make money whether or not we drive off the fiscal cliff or spiral into another recession. The trick is to figure out who they are and what they're doing. Sitting on cash right now is financial suicide.

[Coito ergo sum]

That going deeper into debt to prime the economy may not be such a bad idea, since deficits don't matter.

So, you weren't being sarcastic?

Well, maybe a little since it WAS a rather prominent Republican who said that deficits don't matter, when the Republicans/Tea Party are now insisting that the deficit IS a problem.

So? What is that supposed to mean? Some Dick said "deficits don't matter" 10 years ago (in a different economic condition) and that's supposed to mean what? That there is something wrong with suggesting they matter now?

When he said that, the deficit was extraordinarily low, relative to today's deficits. That was in 2002, and the deficit was $158 billion. If, indeed, the deficit was $158 billion this year, I'd say they don't matter either. If the deficit was $300 billion, I'd be jumping for joy, and I would suggest that they aren't important, and hence "don't matter."

Change that to $1.1 or $1.4 trillion -- 9 times or so the deficit that we were running when Cheney said that. Isn't it possible that deficits don't matter when they are lower, but matter a great deal when they are very high? And, isn't it different when we have a $15 trillion economy and a $6 trillion debt, as opposed to a $16 trillion economy and a $16 trillion debt?

[Coito ergo sum]

Slavery works too. Just thought I'd mention it.

Which applies perfectly to your comment about Keynesian economics working.

EDIT -- In the news today: Applications for jobless benefits surged by 78,000 to 439,000 in the week ended Nov. 10, the most since April 2011, the Labor Department said today in Washington.

US Poverty rate is way up.

Eurozone fell into recession: http://www.reuters.com/article/2012/11/ ... HV20121115