Monday, Dec 10, 2007
Goldman Sachs, Morgan Stanley, and Lehman Brothers, have all begun to tear up the "decoupling" manual
The Telegraph: Decoupling dies as half the globe hits crunch
The rising economies of Asia are too small and deformed to rescue world growth as America, Britain, Australia, and Club Med face their day of debt reckoning. China may make matters worse, not better.
Posted by sold 2 rent 1 @ 01:28 PM (705 views) Add Comment
8 Comments
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1. happyrenterz said...
"The root cause of this staggering debacle lies in errors made long ago by the Federal Reserve and fellow sinners. It was they who inflated the credit bubble by holding interest rates too low for too long. It was they who lulled their nations into suicidal levels of debt." enough said...
2. inbreda said...
Very good post. Supports a lot of what we have been saying, but I am still very nervous - particularly given the quote:
"His subprime rate freeze is undoubtedly a stinker. The reckless are bailed-out. Those who scrimped to amass a little equity get stiffed. Moral hazard runs amok. But bankruptcy settlements are always ugly. This differs only in scale."
Can't help thinking that the UK government is 2 steps away from rewarding my prudence by stealing my savings.
3. sold 2 rent 1 said...
inbreda,
It will be theft through inflation, devaluation and unplanned nationalisation.
"US Treasury Secretary Hank Paulson confronts the very real danger of a credit implosion spiralling into a full-blown depression. Given the risks, he can be forgiven for pushing through a rescue plan last week that amounts to a flagrant abuse of contract law and capitalist principles."
There goes the D word again - and we are not even in a recession yet.
4. inbreda said...
My worry is that the price of assets (eg house prices AND gold) have increased because of the "invention" of money by way of cheap credit. In the credit crunch i am worried that - although I don't own a house - the value of my assets will fall. At least if I had a house I would still have a place to live - whereas depreciating gold would be rather more painful to me at the moment.
5. tick tock said...
Would free marketeers rather see the whole edifice of capitalism burned to the ground to make their point?
Oh the Irony!
But just what is the 'free marketeers' point now?
If an entire ideology not only fails to do 'what it says on the tin' (i.e.growing wealth gap with little or no 'trickle down' effect - longer working hours for less rewards etc,etc.) and cannot be run without socialisation of losses at the end of a 'boom' which has left all but the most wealthy up to their eyes in debt, then what is the point of 'free markets' at all, beyond the enrichment of Investment Banks at the expense of the working population?
The emperor is looking pretty naked to me.
6. sold 2 rent 1 said...
inbreda,
I have spread my risks across a wide variety of physical gold/gold stocks, brokerage companies, countries, ETFs, juniors and mid-caps stocks.
As long as you have gold there is nothing to worry about in the short to medium term (under 4 years).
In the long term (over 4 years) gold will either fall in value because the k-spring is emerging again (good news), or complete financial breakdown has happened and only water and food have any value (bad news).
7. Stoatgobbler said...
Gold going (much, much) higher. We're in a fking big mess.
8. enuii said...
I like this little quote,
'The strategic failure of a whole generation of economists, bankers, and policy-makers has been so enormous that it may now take a strong draught of socialism to save the Western democracies.'
Guess thats not the NeuLiebor champagne variety then!
Does anyone know of any real socialists who could stick one on Gordon in a NeuLiebor night of the long knives?