$60 Trillion Loss (Great Depression 2009)

Quote from tradersboredom:

the assets were never worth 60 trillion and nobody actually paid 60 trillion for them so how can you lose 10 trillion. DUMBO.

if you lose 60 trillion somebody must have profited by 60 trillion. thee isn't 60 trillion dollars CASH in any bank.
More...

In a leveraged world everyone can lose.

If commitments are made at one price level and based on expected future returns and appreciation, and the price level declines those are real dollars lost.

Paper value in a leveraged world like ours is real value because we are foolish enough to make decisions based on it.
 
.

Talknet: ...The chart shows a stunning loss of $30 trillion stock market wealth around the world.


*****


January 8, 2009

SouthAmerica: I mentioned that figure in some of my postings. But I will not be surprised if in 2009 and 2010 the stock market wealth from around the world decline in value another US$ 7 or 8 trillion dollars.

.
 
Quote from ByLoSellHi:

Completely agree that the planet earth is in the midst of a complete economic reformation, and it will be an incredibly painful, wrenching and profound one, and we can't possibly imagine what will soon be reality.

We are already seeing bizarre events as the psyche of BSDs and the masses are being affected to the extreme, and the biggest unknown is how far businesses and consumers will retrench and cut spending - if they really pull their head into their shells, we could face an economic winter the likes of which we've rarely experienced, at a time when so many other incredible and unprecedented events are merging.

We are entering a new 'age,' and despite the oft-repeated claim that no one should try to be a market timer, only those who hunker down now and know approximately when to re-emerge and deploy capital may survive, let alone grow wealthier.
More...

ok, you are clearly educated and well read; but imo wrong. have you been through any major recessions? i have, and this one is a tough one; but not much worse than the last big one (read s-l crisis). i have multiple businesses that are construction related that are picking up. mind you, when the housing boom was topping, i was one who was screaming that is was out of control also. but you guys seem like to me similar to the same guys who cheerlead whatever boom or bust we are in and cannot see the "very" big macro picture. i don't have a lot of time to write; but this thing was coming, is here now, and will go away soon. you all will see. i know something about this and the power of the government stimulating combined with pent-up demand. see what i said here:
http://www.elitetrader.com/vb/showthread.php?s=&postid=1258922#post1258922

i was aware then of the crash, and am certain of a turn around, despite job losses, market losses, etc. i'll save this post to show you once the recovery starts.
 
Wal-Mart is worth $250 Billion and $60 Trillion = $60,000 Billions.

Now 60,000/250 = 240. So $60 Trillion = 240 Wal-Mart companies.

This means loss of $60 Trillion has shut down 240 Wal-Mart companies in the world.

Wal-Mart has 2,055,000 employees.

Now 2,055,000 x 240 = 493200000

This means 493 million jobs have been lost worldwide because of $60 Trillion loss from commodities, stocks, bonds, real estate. This is DEFINATELY beyond rescue.
 
Quote from stock_trad3r:

how would you define over leveraged? The concept of leverage is one of the great economic achievements of the past 150 years.
More...
90% of $63 Trillion loss is owned by Giant banks and Giant investment companies, Mutual fund, Hedge funds. Where do they get their money from?

The answer is "Worldwide people".

Worldwide people deposit money with Banks and Banks trades "people's money" by giving loans to inefficent & worthless giant companies.

Worldwide people deposit money with Hedge & Mutual funds & they collectively invest "people's money" in loss-making business such as Stocks, over-hyped real estates & commodities. People have no knowledge where their money is getting invested.

ultimately worldwide people suffer loss of $63 Trillion and they are poorer by $63 Trillion.

Then worldwide central banks or governments further invest $5 Trillion+ into "sinking world economy" to save worthless, inefficient giant companies and banks without any business brains.

In the end, worldwide central banks also become bankrupt.

What is the moral of this story?
 
.

Talknet: By some estimates, combined losses in commodities, stocks, bonds, real estate are greater than $60 trillion. This is beyond rescue.

…Wal-Mart is worth $250 Billion and $60 Trillion = $60,000 Billions.

Now 60,000/250 = 240. So $60 Trillion = 240 Wal-Mart companies.

This means loss of $60 Trillion has shut down 240 Wal-Mart companies in the world.

Wal-Mart has 2,055,000 employees.

Now 2,055,000 x 240 = 493200000

This means 493 million jobs have been lost worldwide because of $60 Trillion loss from commodities, stocks, bonds, real estate. This is DEFINATELY beyond rescue.


*******


January 8, 2009

SouthAmerica: I am sorry to say that, but your reasoning about Wal-Mart the $60 trillion loss and the 493 million jobs lost worldwide it does not make any sense.

Why?

Because a big chunk of that figure is just deleveraging losses and hot air from massive speculations around the world.

After the dust settles the real economy still be there and most people still have jobs.

.
 
.

January 9, 2009

SouthAmerica: Reply to Talknet

Let me give you just one actual example for you to understand why your reasoning was incorrect.

From May 21, 2008 to November 20, 2008 Petrobras stock declined from US$ 75 per share to US$ 15 per share and Petrobras lost during that period US$ 266 billion in market cap.

Since November 20, 2008 the Petrobras stock has increased from US$ 15 per share to the current price of US$ 27 per share.

Even though Petrobras lost during that period a Wal-Mart equivalent in market cap – That not means that Petrobras is going to layoff thousands of people on the contrary Petrobras is in the process of hiring thousands of new workers to help develop the new oil fields. By the way, Petrobras just found more oil in the north of Brazil.

In this example alone there is ¼ of US$ 1 trillion of the loss that you have mentioned and no loss of employment here.

On your figure they included trillions of dollars in paper losses related to real estate – the market value of real estate for millions of people has declined 30 or 40 percent or even more, but that not means that all this people are going to move from their houses – most of these real estate properties had increased in value many times over in the last 30 years.
Here is just another example of how trillions in paper loss don’t translate in millions of job losses and so on….

By the way, most companies from around the world don’t have 2.1 million full time employees such as Wal-Mart – for example Petrobras has only 69,000 full time employees.

I hope you understand now why your reasoning on your Wal-Mart example it does not make sense.


*****


Info as of January 8, 2009

Wal-Mart Stores (NYSE: WMT)

Full Time Employees: 2,100,000

Closing Price: $ 51 per share

Market Cap: US$ 202 Billion

Source: http://finance.yahoo.com/q?s=WMT


*****


Petrobras - PETROLEO BRASILEIRO - (NYSE: PBR)
Full Time Employees: 69,000


Info as of January 8, 2009

Closing Price: $ 27 per share

Market Cap: US$ 119 Billion

Note: Current market info.


*****


Info as of July 11, 2008

Current price: US$ 61

Market Cap: US$ 270 billion

Note: (My article about the Renationalization of Petrobras was published on July 8, 2008)


*****


Info as of November 20, 2008

Closing Price: US$ 15 per share

Market Cap: US$ 66 Billion

Note: November 20, 2008 date when Petrobras stock reached the low for the year 2008.


*****


Info as of May 21, 2008

Closing Price: US$ 75 per share

Market Cap: US$ 332 Billion

Note: May 21, 2008 date when Petrobras stock reached the high for the year 2008.

.
 
Quote from southamerica:

SouthAmerica: I am sorry to say that, but your reasoning about Wal-Mart the $60 trillion loss and the 493 million jobs lost worldwide it does not make any sense.
More...
SouthAmerica, I agree with you. I have just posted an example for how much is the $60 Trillion worth to the world economy.

I think only 1000 million or 1 billion people have jobs worldwide. If 500 million jobs are lost it's end of world economy.
 
Dr. Marc Faber report says Gold will reach $5000 per ounce. That's foolish.

Because world economy is poorer by $60 Trillion. People do not have money to buy gold.

In fact, now central banks and people will start selling gold to earn cash/money. Gold will crash to $500 per ounce.
 
Quote from talknet:


....In the end, worldwide central banks also become bankrupt.

What is the moral of this story?
More...
I no Marc Faber, but here goes:

1) Business cycles are for real
2) Booms are always followed by busts
3) No one can predict with 100% accuracy the future levels of financial markets (Ask Abby Jo Cohen !!)
4) Best to let the free markets quickly make the necessary adjustments as government intervention will once again use scarce resources inefficiently which will prolong and/or make the crisis even worse.
 
You must log in or register to reply here.
Back
Top