French Bank freezes US funds;Stocks Plunge on Rising Credit Anxiety

I really worry for the US.

50 years ago we were a nation that produced valuable things. We made everything from the best cars to toasters. We looked down upon misfits like alcohol brewers and pornographers because they were not productive members of society.

Now we are a nation full of marketing consultants and bureacrats who do not produce anything of value, yet consume more than ever. The only people that produce anything of value that the outside world wants to buy are the alcohol brewers and pornographers. The rest of our economy is based on specultative bubbles like the real estate market.

Our nation will not have a stable economy until it becomes a nation of people that once again make things that are of value to the world. Who can have any confidence in an economy that consumes so much wealth, yet generates so little wealth?

Originally posted by hotpinkurinalmint
I really worry for the US.

50 years ago we were a nation that produced valuable things. We made everything from the best cars to toasters. We looked down upon misfits like alcohol brewers and pornographers because they were not productive members of society.

Yes, we are in a post-industrial service-based economy. But, I think we're still better off than we were going into World War II if something of that nature and scale came up again. Personally, I don't think it would take that long to change wedding planners, stock brokers, and Starbucks coffee pourers into riveters, miners, and builders of a wartime industrial economy if that is what is needed. We did it before, we could do it again.

You do not need a degree to see where things are going.
Its a fact, no matter what you know, you cannot predict the market, its as random as human nature.

But when you stand back and look at past events, future threats and current deficincies... its obvious things are looking 'peachy'

Chinese takeout anyone? Last year, the US imported almost $300 billion of products from China where just anything you can think of is MADE IN CHINA here!
If we need to revert back to where we were before, we need to switch back to MADE IN THE US. That's step #1.

[edit on 10-8-2007 by Palasheea]

When the options are; destroy your economy...or...debase your currency, expect a .25% rate cut before years end.

Regarding Asian, and European markets, all markets have subprime exposure including China. The question isn't really about the breadth of subprime contagion, but rather one of depth. I came across this quote today from Art Cashin of UBS/Payne Webber: “We don’t know what it is we don’t know.” Today he added “We don’t know who doesn’t know.”

Sounds a little like Rumsfeld...only he's being honest

One could thank the falling dollar, for all of your concerns.

The cheaper the dollar, the cheaper the goods made in the U.S.; the more competitive our products are.

Originally posted by LogansRun

Dude, that is a bit harsh and you know it. That comment you are referring to was taken WAY out of context.

What is harsh is to claim if the U.S. economy goes down the drain affecting all Americans that certain people will sleep well and happy...that's what's harsh...

Originally posted by LogansRun
FACT - we did this to ourselves with our capitalistic, and greedy ways.

Greedy ways?.... Perhaps you haven't realized it yet, but a lot of what are called "socialist countries" actually have capitalism as an economic system, and quite a few European people spent as much as Americans do. Are you also going to claim the same of them?

Originally posted by LogansRun
You immediately jumped on a comment (and you do this in a lot of threads, god knows you have done it to me), while it may have been a bit harsh, had an underlying truth -no one is going to "love it" if we suffer a depression as this will most definately affect the rest of the world, but dammit we made this happen ourselves.

First of all, don't bring into this thread what has been discussed onanother topic, all you will do is derail the thread, that's what you do when you mention what has been said or what wasn't said in "a thread that has nothing to do with this one". That's disengenious to say the least. Second of all, that member did state what I mentioned, and as i stated earlier, Americans are not the only people who use Capitalism to live and enjoy life. How many Europeans go on vacation spending money, and even have a summer home somewhere in the Mediterranean or even in the country?...

Originally posted by LogansRun
All at the same time squandering a chance to really be a shining beacon in this world (directly after 911) by thumbing our nose to the world and decided to pursue the agenda of a bunch of wrinkled, crusty old aholes (present administration).

Again, trying to blame the present administration for things which have been happening for a long time.

Originally posted by Iblis

The cheaper the dollar, the cheaper the goods made in the U.S.; the more competitive our products are.

....and the more expensive our imports...we do import a bit. US companies that import raw materials, and parts will pay more right along with the American consumer. May add a few jobs, and increase corporate profits, but what does a weaker dollar do to the purchasing power of those on fixed incomes, or of average joe...me? How about oil? Won't traders will need more $ to compete against stronger currencies for contracts in the world oil market?

I don't revel in what comes our way, and I don't think it will happen overnight, but I have done my best to educate, and position my family to handle the contingencies. Now we'll watch it unfold, and see how it all plays out...the sooner the better, for everyone concerned imho.

Originally posted by Iblis
One could thank the falling dollar, for all of your concerns.

The cheaper the dollar, the cheaper the goods made in the U.S.; the more competitive our products are.

Heh heh. That did make me chuckle. Imagining the dollar having such a low value...... I've pictured in my mind massive sweatshops, workers earning less than a dollar a day and people accross the world going "Oh no, not made in the US?!" and expecting the low quality item to break in a few short weeks.

Which would be a shame, the US produces excellent tools and (surprisingly) some very high quality steel cooking utensils.

Not that such an extreme outcome very likely, the value of the dollar is probably going to continue to deteriorate. Good for tourists though, I look forward to my next holiday as I'll be able to live like a king! £50 converted into dollars will look like a fistful of tögrög!

Central banks in Malaysia, Indonesia and the Philippines intervened to sell dollars to support their currencies.

news.bbc.co.uk...

Bank of England have made a statement last night

The Governor of the Bank of England sought to reassure the City yesterday over fallout from recent market turmoil, but he issued a blunt warning that the Bank would not cut interest rates to bail out any careless lenders hit by loan defaults.

Mervyn King admitted that there were big uncertainties over the scale and future impact of the turbulence in world markets over the past month.

“We don’t know whether these tremors in financial markets signal a more disruptive movement to come, or constitute a gradual release of pressure on [interest rate] spreads that have built up over some time.

“So it’s impossible at this stage to judge how large and how persistent this tightening of credit conditions is likely to be.”

Well, sounds like the ECB. A lot of uncertainty in the statement.


[edit on 10-8-2007 by infinite]

johnsto77:
One thing I'm looking at is why does Europe seem to be reacting worse than the U.S. when this is supposed to be a U.S. problem? If you look at Asian trading this morning the euro is falling more than the dollar against the yen. Plus the European Central Bank yesterday injected like six times the amount of cash into their banking system as the Federal Reserve did in the U.S. system. It is puzzling to me. Maybe the banks/markets know something we don't yet

That is not strange. As we learn here in world economy the US market "leader", in the sense that everything seems to happen there first. We are taught in highschool economics that the American consumer market feeds your economy and when you stop consuming (also european products) recession starts. Also in Europe, because we export to the USmarket, and although we don't have a consumer controlled market. It sounds stupid, but when American buyers stop buying the world economy dwindles, and it has to do with your scale of buying. This is one reason that some US-leaders were against this huge European single market arising. That means power. The rising European will have more power and has more power to control the events. This is shown now. In a sense we are saving the worldmarket by saving the US-butt.
But to go back to the core of the question. When the ECB reacts on something like this , it is because the are trying to stop a wave of effects on the world market. Remember, it is a global market these days. The ECB gives the banks money so they won't stop lending money to anybody.
When all banks hesitate to give people credit, it is the end of consuming and game over for globalism.

We are spending slaves, and thus we have the power, I am curious what would happen if people wpould strike on spending for a couple of months. Buy some bags of rice and canfood on sit it out. We will say we will start spending again if all secrets are revealed.

So some may think this is a good thing. Back to growing vegies on my roof. My tomatoes are jummy.

Politcal and financially you could say that the ECB is showing her muscles. We are in control now? A while ago Wolfowitz was dumped as director of the World Bank mainly through pressure of non-americans who would like to see a NON-american director of the WB. Still, they didn succeed in that switch. The americans would Wolfowitz go, but only if "still" an american would be in charge there. In the financial world is a lot of powerplay at hand. It is an interesting watch these days.
[edit on 10-8-2007 by Pjotr]

[edit on 10-8-2007 by Pjotr]

[edit on 10-8-2007 by Pjotr]

[edit on 10-8-2007 by Pjotr]

Ladies and Gentlemen

There is a massacre in London..

FTSE is down nearly 3%.

Originally posted by Gools

Originally posted by uberarcanist
Well, Gools, it could be a heck of a lot worse. Say, were you an adult in the early 80s?

If your question is related to my memory of double digit interest rates, $800 gold, stagflation and wage and price controls (Trudeau's 6&5 program here in Canada) yeah I recall the early 80's and my first jobs. My personal opinion... it will get much worse this time - especially by 2009.

.

Thanks Gools, you have reaffirmed my faith in the belief that those who don't learn from history are doomed to repeat it.

I too remember Trudeau's laughable attempt to control the price of goods whilst ignoring the real problems in the Canadian economy. The 6 & 5 program was a disaster, and he and Marc Lalonde should have been run out of the country for trying it. It was nothing short of an end run around the free market, and quite possibly an attempt to subvert our own democratic freedom of choice. It is no secret that I believe Trudeau was a communist, and this was only one of many moves that gives credence to my belief. He was, as Dick Nixon said in his infanous tapes, "an A$$hole".

That said, I will sleep well during the coming inevitable recession States side. I do not for one minute take solace in other's discomfort, pain, or possible bankruptcy. But the addage about sleeping in the bed one makes comes to mind.

If the Chinese were to dump their bonds America would not likely suffer as much as if the middle east changes the valuation of their oil into Euros. That in my humble opinion would cause the outbreak of wild inflation in the US and quite possibly WW3

At the very least, the American economy would be highly unstable, and all of the rhetoric from Washington, would be just that. They would need some form of military action to restabilize their injured economy.

All in MHO.

Sleep tight!

more news..came out about 30 mins ago

ECB Adds a Further $83.6 Billion in Liquidity

"The liquidity-providing fine-tuning operation follows up on the operation conducted yesterday and aims to assure orderly conditions in the euro money market," the ECB said on its official Web site.

www.cnbc.com...

Earlier in the thread someone mentioned that Americans didn't save any money. Of course they don't save, it's virtual financial suicide! The current savings earning rates at 3.25% at my FCU. I can go out and pick up change in parking lots and earn more than the interest paid to the average US wager earner could if they saved 10% of the wages after taxes. It works out right now to be less than 28 cents paid a day in interest. At best current CD rates, it will take 11-12 years to double your original deposits and the doubling has barely stayed ahead of inflation rates. It works out that the original deposit while doubling in monetary value has actually grown at less than the rate of inflation. It looks like an growth of real world value of less than 40% in 11-12 years. I'm saving small amounts till I reach my budget for 6 months worth of living expenses after that I'll add money to keep up with inflation but the rest of my money is going into some sort of investment and not savings. Until the US financial institutions start paying out rates that actually double the real world value of your initial deposit in the 7-10 year range, putting money in a savings accounts looks like a slowly sinking ship.

Get out of debt, buy the land your house sits on first and build your house one board at a time if you have to but stay away from the US lending industry as far as you can. They're in the business of making money off of you and have no particular interest in helping you gain financially.

Another day of sharp falls it seems

DOW future around the -200 mark.

FTSE is nearly 4% down!

And the funny thing is, as the ECB pumps more and more money, the stocks keep falling cause the speculators know something is really wrong then..still good they do it though..
A good thing in this banking crisis, is now all these silly take overs will stop for once, i cant imagine the ABN AMRO being taking over by the belgiums?[Fortis]

[edit on 10-8-2007 by Foppezao]

Finally it makes the main headline on BBC