Wednesday, Mar 14, 2007
Eat your words Mr Economics?
Market Watch: Subprime concerns overblown
"The subprime-mortgage market is big, but it's not big enough to push the U.S. economy into a recession by causing a credit crunch....it will be the most hyped disaster that never occurred since Y2K'
Posted by nearly30 @ 08:39 PM (150 views) Add Comment
8 Comments
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1. george monsoon said...
Great lets get the hype up there.. and scare the living sh** out of everyone. This may just be the nudge we all need.
2. nearly30 said...
Nudge or a wink?
This makes for sober reading:
[Days leading up to '1929 Crash']
"In days leading up to Black Tuesday the market was unstable. Periods of panic selling and high volumes of trading were interspersed with brief periods of rising prices and recovery. After the crash the Dow Jones Industrial Average (DJIA) recovered early in 1930, only to reverse again, reaching a low point of the great bear market in 1932".
Sounds familiar?!! - but then again it could never happen again! Could it? Surely we learn from history?
[1941 British Occupation of Iraq]
"The Anglo-Iraqi War is the name of hostilities between the United Kingdom and the Iraqi nationalist government during the Second World War. It lasted from April 18 to May 30, 1941. Although it was barely a month long, the campaign resulted in a renewal of British occupation of the country. "
3. japanese uncle said...
Well we simply cannot expect a man in such position to say "To be honest we are all doomed.", can we?
4. lvmreader said...
Please read some of the Argentina articles I posted earlier.
This market is in for some nasty action.
5. japanese uncle said...
I hope UK's financial infrastructure is not that precarious as that of Argentina. Anyway my hunch tells that UK will follow the trail of the Japanese economy into long-term deflation. Carrying debt is a very bad idea in such climate, indeed.
6. p. o. o. r said...
Nearly30 mentioned about 'Black Tuesday' which is always considered to be the start of the great depression in America - so I looked up for info http://www.gusmorino.com/pag3/greatdepression/ This article is really worth reading, as the similarities with what is going on now compared to back then are uncanny. Back then the boom of the 20's was the Radio, now it is the Computer, The motor industry was booming, now it is air travel. In the 20's people had the buy now pay later attitude, with cheap credit - now it is the same... Anyhow chek out the link as i certainly found it interesting http://www.gusmorino.com/pag3/greatdepression/
7. japanese uncle said...
Many thank for the info. It is extremely interesting. After all large mass of our society are lower middle class and working class, without whose consumption this economy cannot be run properly. Very simple.
8. nearly30 said...
JP - indeed we are currently in a state where the jobs market looks more like a bottom-heavy 'hour-glass' - most people are being pushed into lower paid jobs and with a contraction of middle income jobs. Conversely - the wealth of the economy becomes more of a top-heavy 'hour-glass' - with higher concentrations of the wealth going to the top.
The current credit boom IMHO is a symptom of people being pushed into one particular direction. Those with wealth find credit can afford such things as 'buy-to-let', where-as those with decreasing wealth find credit as a transitory-to-perminent measure to 'afford' the costs of living - factored against a lowering of income and increased costs of living.
It begs the question - when does the 'hour-glass' finally pinch into 2 distinctive camps?