Comments on: Fed Lowers Economic Forecast, May Cut Rates

By: odograph

odograph — Thu, 20 Nov 2008 19:10:09 +0000

What the Hell does "slow free fall" mean?

The textbook for "free fall" is probably "without support." Have you spotted support? That would make us all breathe easier.

By: Steve Verdon

Steve Verdon — Thu, 20 Nov 2008 16:59:27 +0000

I think this is a time of great risk, and that it's possible that we are in a slow free-fall. Time will tell.

What the Hell does "slow free fall" mean? That the economy is slowly contracting? If so that describes every recession.

By: odograph

odograph — Thu, 20 Nov 2008 14:41:11 +0000

I've long suspected that quite a bit of that money has been siphoned off to buy California real estate. Neither we nor they really have any way of knowing for certain.

I haven't heard of that down here in OC. I had heard, as the tech bubble peaked, that people from NorCal were flying in for a weekend, buying three houses, and leaving again.

The bubble is not purely Chinese after all.

By: Dave Schuler

Dave Schuler — Thu, 20 Nov 2008 14:33:36 +0000

I've been making the “Giant Pool of Money” argument for some time. One thing to keep in mind: the big Chinese “state-owned” banks are incredibly opaque. We (and probably they) have no idea what they've got sitting around in cash reserves.

I've long suspected that quite a bit of that money has been siphoned off to buy California real estate. Neither we nor they really have any way of knowing for certain.

By: odograph

odograph — Thu, 20 Nov 2008 13:50:28 +0000

BTW, the Giant Pool of Money was probably the stimulus for the commodities bubble. There was entirely too much money out there looking for higher-than-Tbill returns.

Things are settled down now because the Giant Pool is fearful enough to accept Tbills ... but the pendulum has swung too far. Now too much is in safe investments and not enough is being sent toward the real economy ...

By: odograph

odograph — Thu, 20 Nov 2008 13:38:22 +0000

Not being an economist(Thank God I escaped that burden of being wrong more than right)I would think that the Dems program of "not drilling" sent the oil and gas prices sky high whereby the destruction to our economy was begun.

Will you trust me if I tell you this as a centrist Republican (still!)? We can be fairly confident now that the oil surge was an investment bubble. Prices surged faster than (admittedly expanding) demand. They are falling now, not because we started off-shore drilling, but because the tulip bubble popped. On real causes of the credit crisis, I think the two This American Life Pieces are still the best introductions available: The Giant Pool of Money Another Frightening Show About the Economy

By: odograph

odograph — Thu, 20 Nov 2008 13:31:14 +0000

Re. "free falling"

Is it? I'm not sure the evidence is that clear. I keep hearing complaints about “the greatest economic crisis since the Great Depression” which it most certainly isn't.

I think this is a time of great risk, and that it's possible that we are in a slow free-fall. Time will tell. Possibly you are looking at "the real economy" when economists are looking credit markets and etc. There's a lag between the two. One thing that's interesting to me is that we've started to break through the "worst since the depression" articles, and see some "like the depression" pieces. I don't have a pointer handy, but I read the top econ blogs and have seen them pop up. Time's Obama as FDR cover is also a strong indicator of pop-consciousness going that way.

By: DL

DL — Thu, 20 Nov 2008 12:28:38 +0000

Not being an economist(Thank God I escaped that burden of being wrong more than right)I would think that the Dems program of "not drilling" sent the oil and gas prices sky high whereby the destruction to our economy was begun. It was only exacerbated by the Dems big bully pulpit (the CRA) forced sub prime mortgage failure which destroyed the housing market, whereby the rest followed. Bush will get the blame from the same people that ignored or denied Clinton's poor economy he handed to Bush.
It didn't help to have Bush demanding instant bailouts and stimulus packages which make the taxpayer the Daddy Warbucks of first resort.

By: Dave Schuler

Dave Schuler — Thu, 20 Nov 2008 12:10:54 +0000

The economy is in freefall

Is it? I'm not sure the evidence is that clear. I keep hearing complaints about “the greatest economic crisis since the Great Depression” which it most certainly isn't. What is true right now is that the financial system is in the greatest crisis since the 1930's. The economic system hasn't gone that far. It may still but it hasn't yet. It seems to me that we need to deal with what is happening rather than with what might happen and that hyperventilating about the latter contributes to bringing it to pass.

By: anjin-san

anjin-san — Thu, 20 Nov 2008 04:08:08 +0000

The economy is in freefall, but Bush is focused on doing as much damage to the environment as humanly possible while Rome burns around him.

One constant about Bush, every time you think he has hit bottom, that he could not possibly be any worse, you are wrong.

By: CPI drops 1% in October (12% annualized) — Dean’s World

CPI drops 1% in October (12% annualized) — Dean’s World — Wed, 19 Nov 2008 22:47:03 +0000

[...] Also via Steve Verdon, the Fed is signaling that it intends to cut interest rates. This is consistant both with my [...]

By: Dave Schuler

Dave Schuler — Wed, 19 Nov 2008 21:12:22 +0000

It seems to me that the serious longterm problem is the failure of our economy to create jobs. For the last six or seven years the number of new jobs added to the economy has barely kept up with the natural increase. If that pattern continues, it's hard for me to see how those who lose their jobs during the current turndown ever get back into the job market.