I got back from New York, and the economy collapsed.

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ZoWie
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I got back from New York, and the economy collapsed.

Post by ZoWie »

I took off from JFK in one world, and by the time I was conscious enough to check the numbers, it was clear that I was living in a different one. The inflation numbers, which we'd been assured had peaked, instead went vertical. Stocks and crypto are in free fall.

The Fed said 50 basis points would fix inflation. That now is shown to be like Neville Chamberlain saying his agreement with Hitler had brought peace in our time. The Fed is currently zero credibility.

Hope you didn't get taken in by all the hype around crypto. Money from nowhere is now going to a similar place - nowhere. Crypto is in full collapse. It's at levels even I find amazingly wretched, and I always thought it was a South Sea Bubble/ Tulip Mania with server farms.

It's only too bad it's too late to cash everything out, and bury it in a box 10 feet below the back yard.
"We must remember that we cannot abandon the truth and remain a free nation." --Liz Cheney, Republican, 7/21/22
bird
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Re: I got back from New York, and the economy collapsed.

Post by bird »

ZoWie wrote: Mon Jun 13, 2022 11:51 am I took off from JFK in one world, and by the time I was conscious enough to check the numbers, it was clear that I was living in a different one. The inflation numbers, which we'd been assured had peaked, instead went vertical. Stocks and crypto are in free fall.

The Fed said 50 basis points would fix inflation. That now is shown to be like Neville Chamberlain saying his agreement with Hitler had brought peace in our time. The Fed is currently zero credibility.

Hope you didn't get taken in by all the hype around crypto. Money from nowhere is now going to a similar place - nowhere. Crypto is in full collapse. It's at levels even I find amazingly wretched, and I always thought it was a South Sea Bubble/ Tulip Mania with server farms.

It's only too bad it's too late to cash everything out, and bury it in a box 10 feet below the back yard.
It is interesting that I have seen crypto atms in some stores. I agree that I thought it was a bubble at best. I also thought it was utter bullshit.

As for the Fed? If they are going the raising rates route then the only road, imo, is Volcker Avenue. Slam rates sky-high and put the country in recession. I guess the so-called “Great Moderation” was bullshit after all.
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ZoWie
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Re: I got back from New York, and the economy collapsed.

Post by ZoWie »

Trouble is that a severe recession, while the surest long term solution, guarantees a Republican in the White House and Republican majorities in both houses come 2025. There are parables about rocks and hard places that are applicable here.
"We must remember that we cannot abandon the truth and remain a free nation." --Liz Cheney, Republican, 7/21/22
bird
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Re: I got back from New York, and the economy collapsed.

Post by bird »

ZoWie wrote: Mon Jun 13, 2022 1:39 pm Trouble is that a severe recession, while the surest long term solution, guarantees a Republican in the White House and Republican majorities in both houses come 2025. There are parables about rocks and hard places that are applicable here.
Oh, no argument at all.

This underscores much mythology about economics. We have, basically, full employment although I haven’t checked U-6 lately.

We have seen “growth” as well as stagnation. Growth has been skewed by inflation prior to the running-around-with-hair-on-fire inflation of late. Nobody, NOBODY, understands when the psychological levers are pushed that cause prices to go up. Yes, diminishing margins are part of it as Smith noted, iirc. The alternative to that is destruction by consolidation. As for the old “law of supply and demand” there has never been a better example of the difference between causation and correlation. The greed/fear response of human beings increases prices.

The entire social edifice is based upon 2 conditions: confidence and cohesion. Both of these are either completely suspended or on the verge of suspension. We are heading toward Thatcher The Idiot’s wet dream of “no such thing as society”.

I, personally, don’t want to be around when that arrives. The end result is chaos or charlatans/strongmen.
Motor City
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Re: I got back from New York, and the economy collapsed.

Post by Motor City »

bird wrote: Mon Jun 13, 2022 2:09 pm Oh, no argument at all.

This underscores much mythology about economics. We have, basically, full employment although I haven’t checked U-6 lately.

We have seen “growth” as well as stagnation. Growth has been skewed by inflation prior to the running-around-with-hair-on-fire inflation of late. Nobody, NOBODY, understands when the psychological levers are pushed that cause prices to go up. Yes, diminishing margins are part of it as Smith noted, iirc. The alternative to that is destruction by consolidation. As for the old “law of supply and demand” there has never been a better example of the difference between causation and correlation. The greed/fear response of human beings increases prices.

The entire social edifice is based upon 2 conditions: confidence and cohesion. Both of these are either completely suspended or on the verge of suspension. We are heading toward Thatcher The Idiot’s wet dream of “no such thing as society”.

I, personally, don’t want to be around when that arrives. The end result is chaos or charlatans/strongmen.
No it underscores the mythology about the rhetoric and measurements of employment full partial or otherwise. Employment growth is people dying from covid or their health giving out from working without sleep or a day off or lack of access to health care, or people killed in a mass shooting or people changing jobs constantly for reasons beyond their control or succumbing to poverty. its unsustainable in the same way a dog eating itself is.
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ZoWie
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Re: I got back from New York, and the economy collapsed.

Post by ZoWie »

We were running on fumes before the worst pandemic in 100 years and then the biggest European ground war in 75 years. It was already structurally imbalanced, now we see a full collapse.

I don't think any kind of social doomsday is at hand. I do think that if we don't want social progress reversed by about a century's worth, we need to be trying a lot harder than we've been to do the grunt work that stops the shortages, abuses, destruction of intangible assets, and income imbalances that were waiting for the first little malfunction in the system to bite us hard right where you sit down.

The message of all this is that people count. The world does not run on mere numbers or balance sheets. What are we doing for people? The few metrics that exist tell us that it's not enough. Not even close.
"We must remember that we cannot abandon the truth and remain a free nation." --Liz Cheney, Republican, 7/21/22
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Number6
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Re: I got back from New York, and the economy collapsed.

Post by Number6 »

Our economy seems guaranteed to produce good times and bad times through manipulation by those with wealth and political influence. Just like the tides, the economy rises only to recede. Over the past 50 plus years, we've seen the manipulations in the stock market, housing (mortgages) bubbles, banking (Savings and Loans scandals), tech bubbles, etc... While those with the wealth and political influence profit the average worker pays the price with layoffs, higher interest rates, stagnant wages, higher prices for basic needs, etc..
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bradman
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Re: I got back from New York, and the economy collapsed.

Post by bradman »

Lenin may have been wrong about Communism but he was right about Capitalism. It's a boom and bust theory. Hot and cold. Keynes gave us the keys to fix the flaw in Capitalism. Unfortunately, the only time it works is when it's used for Military Keynesianism instead of the Public Works that he favored. He's been spinning in his grave for years now.

So ya, here we go again.

Next up, because of blocked ports, expect a food crisis this summer. It has the potential to make the fuel problems look small in comparison.
I am not a member of any organized political party. I am a Democrat. [Will Rogers]
Motor City
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Re: I got back from New York, and the economy collapsed.

Post by Motor City »

Number6 wrote: Mon Jun 13, 2022 3:36 pm Our economy seems guaranteed to produce good times and bad times through manipulation by those with wealth and political influence. Just like the tides, the economy rises only to recede. Over the past 50 plus years, we've seen the manipulations in the stock market, housing (mortgages) bubbles, banking (Savings and Loans scandals), tech bubbles, etc... While those with the wealth and political influence profit the average worker pays the price with layoffs, higher interest rates, stagnant wages, higher prices for basic needs, etc..
There are also Sunami's they rise and recede but are a whole lot more destructive in the process. Depending on how much it has grown and how concentrated its energy and strength. What's alarming about this time besides the constant menacing with a smile and a wink about recession is the economic radicalization polarization that has transformed large portions of the treasury to be used by the already powerful to prey upon the vulnerable. Thats a storm in the making. you could call it recession but I think its something way more dangerous and terrible than that.
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