Once in a Lifetime - American Consumers' Dealers No Longer Dealing Dope (Credit)?

[nutmeg]

Quote from trendlover:

Ok Nutmeg, I thought this man seemed sincere and honest from the video. I understand cycles too. But it looks like people are saying capitalism has gone out of control, so far that money being spent (is borrowed money) but there is no money to pay it back. It does not exist. Maybe people have the material things that the credit bought them, but someone else does not get payed when there is no money to pay the debt. So is this like other cycles, and will get better with time, or is this something so big and new created from derivitives that went out of control?
I want to read his book too.

Basically, those who do not get paid will incur a loss proportional to the risk they took. Imo, we had a manufacturing economy, now we have a market economy, in a sense it is new to us, we just buy and sell things (ie financial paper is an example).

We had too much money chasing internet stocks, we recovered. I think the good that will come out of this may be a political wake up call for fiscal prudence from the top down.

 

[gnome]

Quote from nutmeg:

"... I think the good that will come out of this may be a political wake up call for fiscal prudence from the top down.

Hahahahahaha.... good one!!

 

[gnome]

Quote from ByLoSellHi:

".. So, we need destruction of capital on a massive scale, in order to flush out the toxins, and to begin to lay the foundation for a more orderly and efficient outlay of wealth building capital.

This would always be a difficult situation, but we'll make it even worse with our efforts to prevent it.

After all, it will be painful and there will be whining and bitching from the electorate for the Gummint to "do something".

The cure will likely be worse than the disease.

 

[watchdaride]

When people talk like this and the media writes about how bad things are the market should start to go up. The media is always behind the eight ball . I think when oil was $140 they were on cnbc saying buy oil stocks and oil is going to $180. when i first started trading and listen to cnbc and those stock shows the stock would always tank after they recommend it .

 

[arealpissedgoy]

Quote from ByLoSellHi:


. The 6,000 sq ft McMansion buying, BMW leasing, $5 Starbucks latte drinking,

A 600 sq ft mansion makes sense, tax deduction. Leasing a BMW on a corporate account makes sense also.

However, who on earth are these people paying for $5 Starbucks piss-in-a-cup. That stuff is nasty tasting.

 

[m1k4]

Quote from thesharpone:
so, so long as america is the most powerful country in the world military wise, stop worrying about the economy of america

Russia is currently the most powerful country military wise

Pootey just took a piss on W 10 days ago

 

[makloda]

Quote from ByLoSellHi:Bernanke & Co. will see to it that those most responsible for the inefficient spending orgy of the last 6 years are bailed out with taxpayers paying the price of their excess.

That is stark reality.

It's not reality, it's your personal delusion.

Last time I looked shareholders in companies "most responsible for the inefficient spending orgy" got their head handed to them on a plate. They lost trillions of dollars worldwide as financial and housing related share prices crumbled, likely with many bankruptcies with shareholders getting a big fat zero to follow. What more to you want?

And please, not another discussion on how Bernanke is running the money printing press 24/7 driving up commodity inflation world wide, punishing savers and retirees. By now, that theory turned out to be a complete headfake.

 

[sprstpd]

Quote from makloda:

Last time I looked shareholders in companies "most responsible for the inefficient spending orgy" got their head handed to them on a plate.

What about Fannie/Freddie? You cannot argue they got what was coming to them if the government bends over backward to bail them out because they cried for mommy.

And please, not another discussion on how Bernanke is running the money printing press 24/7 driving up commodity inflation world wide, punishing savers and retirees. By now, that theory turned out to be a complete headfake.

You are convinced that the current correction in commodities implies the bull run in them is over? We will see.

 

[gnome]

Quote from makloda:

"... And please, not another discussion on how Bernanke is running the money printing press 24/7 driving up commodity inflation world wide, punishing savers and retirees. By now, that theory turned out to be a complete headfake.

How could you have missed this point? That's EXACTLY what he's been doing... other central banks, too.

http://www.nowandfutures.com/key_stats.html

 

[trendlover]

Quote from ByLoSellHi:

The basic point that all but the myopic have to admit is that there was too much debt taken out on over-valued assets (those same assets are now being deflated), and that debt was inefficiently allocated towards capital.

There is now a massive aggregate debt that can't be paid back.

So, we need destruction of capital on a massive scale, in order to flush out the toxins, and to begin to lay the foundation for a more orderly and efficient outlay of wealth building capital.

But who will pay the price tag for the destruction of capital that is necessary?

As you can see already, it will be those, with a few exceptions (like Bear Stearns and some of their employees), who saved and acted prudently


Ok, too much debt on assets bought that are not worth what was paid for them. And yes, people who saved and did not play that game will pay for others mistakes in some ways.
But another way to see this is maybe the savers who still have no debt and some cash, they will be the ones to buy homes that are depreciating. They have the good credit, they have some moneys to work with. What is uncertain is how low some homes will fall. What are they worth? But those that saved and did not play the debt game, will maybe be the ones who will flush out the toxins like you say, and make the stagnant housing market move again...but on a lower price scale. In this way, the savers will capitalize on the mistakes of the banks who made liars loan, and capitalize on the people who took too much equity from their homes and spent it all, and could not pay it back.