Double Dip Recession?

[Adrian II]

if europe takes too long deciding to become an economic and transfer union

It already is, even if Wolfgang Schäuble refuses to call it that. It is also a special trade zone where one country depends on others for most of its experts. The same applies to the West as a whole, including the US.

The real reason why markets are jittery is the basics are lacking everywhere.

If you insist on going by the cra's, you should ask why they have now threatened just about every western country with a downgrade. If Moody's downgrade the US to AA status one of these days because US economic growth has ground to a complete halt, which it has, all eyes will be on the US again. If Moody's sticks to its word that the UK would lose its triple A status if growth stays beneath Osborne's prediction of 1.7 %, which it does since British 2nd quarter growth is zilch, London may be next. It's a circus.

I wish some leader would break the conspiracy of impotence and plead for a Greek debt restructuring, which should have happened over a year ago. In necessary they can opt out of the eurozone for while and take the Argentinian route. Argentine gave its creditors the finger and is doing very well these days with a 8% growth rate.

AII

[Papewaio]

So the only thing that might save the world is if China develops a larger middle class...

[Adrian II]

So the only thing that might save the world is if China develops a larger middle class...

I guess it's already pretty large. It seems as if the days of cheap Chinese labour will soon be over.

But before that we all have to face the crunch. Italy and Spain seem uniquely wobbly these day because the bond market is dull, everybody is waiting for the implementation of the euro rescue plan. So if someone walks into the trading room saying "I've got a couple of Spanish bonds here that I'd like to lose fast", the whole floor is up in arms: "There goes Spain!"

From the Frankfurter Allgemeine to Le Monde to The Telegraph the sentiment seems to be the same: this problem is much deeper and wider.

[...] it is difficult not to be unnerved by what is going on in the markets. We all know at heart that the debt burden of the developed world is unsustainable. By convention, the political classes and the markets take August off, and leave others to have a crisis. But this financial crisis is beginning to look ominous, as if a corrective spasm is approaching.

AII

[Kagemusha]

I think this is the beginning of the end of our economical model and i dont think that is a positive thing.

[Adrian II]

I think this is the beginning of the end of our economical model and i dont think that is a positive thing.

I think it is necessary and the sooner it happens the better. Unless it leads to large-scale war which is rather less inviting, even if the chance of that happening is quite small.

AII

[Kagemusha]

I think it is necessary and the sooner it happens the better. Unless it leads to large-scale war which is rather less inviting, even if the chance of that happening is quite small.

AII

I agree that the economical model might not be sustainable.Call this my gloomy day, but what i know there is no birth without lot of pain, suffering and bloodshed.

[Lemur]

This pretty much sums it up.

[gaelic cowboy]

I think it is necessary and the sooner it happens the better. Unless it leads to large-scale war which is rather less inviting, even if the chance of that happening is quite small.

AII

This is often the case when the level of trade from whoever your dealing with is not likely to rise, basically the gain from war goes up slightly.

[gaelic cowboy]

I guess it's already pretty large. It seems as if the days of cheap Chinese labour will soon be over.

The days of the China Price are numbered

[HoreTore]

'It's like putting your entire mouth into the economy!!'

[gaelic cowboy]

'It's like putting your entire mouth into the economy!!'

This Daniel lad is clever with a paraphrase.

[Xiahou]

The Dow took a 500+ point nosedive today, unemployment remains high, growth slow, housing is still overpriced.... yeah, it's not looking real good.

[Tellos Athenaios]

The days of the China Price are numbered

Whoever wrote the code behind that magazine should be outsourced.

[Furunculus]

It already is, even if Wolfgang Schäuble refuses to call it that. It is also a special trade zone where one country depends on others for most of its experts. The same applies to the West as a whole, including the US.
AII

it will be when national parliaments vote in favour of it in september...........

09.05 Olli Rehn, the EU Monetary Affairs Commissioner, has said the eurozone's yet-to-be approved €440bn European Financial Stability Facility (EFSF) bail-out fund needs to be credible and respected by markets to be effective:

Quote To be effective the EFSF needs to be credible and respected by the markets. And therefore we need to be continuously assessing it, once up and running, in its objective form with these goals in mind.

Rehn wasn't specific about numbers, though Willem Buiter, Citigroup's chief economist calculates that the EFSF needs €2 trillion to deal with the latest crisis.

Rehn will speak to reporters today in Brussels just before lunchtime on the eurozone. More from Brussels correspondent Bruno Waterfield then

[rory_20_uk]

The real reason why markets are jittery is the basics are lacking everywhere.

In a nutshell. The UK is a service based, consumer led economy. Apparently there is nothing wrong with this. as it is basically saying "we make nothing and exist by spending money" I am rather surprised with how sanguine the powers that be are about this.

Although markets are supposed to be about the allocation of wealth effectively, it increasingly is a massive game of chicken - try and do what everyone else is going to do slightly before they do, whatever that is. In the dotcom bubble one trader stated that for one company's share price to be valid, their market capitalisation would have had to be basically 100% of the world in a couple of years, as it made nothing and was loosing money hand over fist. An unpopular view that cost him his job.

The market seems set up for short term panics - no view to 1, 5 or 10 years. This would be fine if Markets had not been finding the West's baby boomer generation from a comfortable cradle to a comfortable grave on IOUs.

[Strike For The South]

So you're telling me spending trillions of dollars when you're in the red is a bad thing?

Predatory lending practices are bad thing?

Brinkmanship is a bad thing?

Do you have a study?

[Kagemusha]

So you're telling me spending trillions of dollars when you're in the red is a bad thing?

Predatory lending practices are bad thing?

Brinkmanship is a bad thing?



Do you have a study?

Spending when recession is looming over is a good thing, but not spending on fiscal business, but spending on somethinhg that creates consumption and jobs.

[HoreTore]

So you're telling me spending trillions of dollars when you're in the red is a bad thing?

Predatory lending practices are bad thing?

Brinkmanship is a bad thing?

Do you have a study?

A state should never, EVER have to take up loans.

Unfortunately, they have to, since people riot when taxes go up. Which is an epic fail at long term thinking, since the interest on those loans will hurt more than the added tax burden would.

It's really fun to watch your tax dollars go towarda paying interest to banks. What's the percentage the US spends on interest again? 13%? With a little more forward thinking, the US populace could've paid 13% less in taxes. Damn those socialists!!

[Fisherking]

Shall we talk about the ironies of giving away all that money to the banks that were too big to fail and now we owe interest to those banks on the free money we all gave to them?

[HoreTore]

They should of course have been nationalized.

Too bad for Joe America that nationalizing stuff is "socialist".

[Fisherking]

They should of course have been nationalized.

Too bad for Joe America that nationalizing stuff is "socialist".

Well, it wasn’t just the US now, was it?

I seem to remember most European Nations also giving away free money to the banks.

Of course in your model we might have been able to take the managers and stand them against a wall and shoot them. That may have made everyone at least feel better but they would still be in debt.