drunkmonkey wrote: » I reckon somewhere between 2020 and 2029 , can't wait for the tiger to come back, I completly missed the boat first time round...
cormywormy wrote: » Post your views to when do you think the recession will end.And what else might happen.
cormywormy wrote: » when do you think the recession will end.
redarmyblues wrote: » Off the top of my head it went something like 1929 wall St crash 1933 unemployment in US peaks somewhere between 25-33% 1937 US economy goes back into recession 1939 War 1956 Dow back to 1929 levels So 2026 or thereabouts
ranger4 wrote: » What are the chances with the gov here addopting a irish version of the us stimulus plan here which could create thousands of badly needed jobs, Could we see the government being able to muster and implement such a plan here?
genericgoon wrote: » No, Ireland can't afford that due to EU restrictions and large deficits expected without any stimulus package. Plus, I'd say Ireland would find it much harder to raise money if it was seen to be taking a big risk by trying an expensive stimulus policy.
daveirl wrote: » This post has been deleted.
padser wrote: » I think you are right (there or thereabouts anyway) in that we will probably see US/Ireland technically exit the recession sometime around then. However I think you can add another year or 18 months to each of those dates before we will see any real growth - meaning we have about 3 years of hard times ahead.
silverharp wrote: » A series of headlines from 1929/31 , who says history doesnt repeat September 1929 “There is no cause to worry. The high tide of prosperity will continue.” –- Andrew W. Mellon, Secretary of the Treasury. October 14, 1929 “Secretary Lamont and officials of the Commerce Department today denied rumors that a severe depression in business and industrial activity was impending, which had been based on a mistaken interpretation of a review of industrial and credit conditions issued earlier in the day by the Federal Reserve Board.” –- New York Times December 5, 1929 “The Government’s business is in sound condition.” –- Andrew W. Mellon, Secretary of the Treasury December 28, 1929 “Maintenance of a general high level of business in the United States during December was reviewed today by Robert P. Lamont, Secretary of Commerce, as an indication that American industry had reached a point where a break in New York stock prices does not necessarily mean a national depression.” –- Associated Press dispatch. January 13, 1930 “Reports to the Department of Commerce indicate that business is in a satisfactory condition, Secretary Lamont said today.” – News item. January 21, 1930 “Definite signs that business and industry have turned the corner from the temporary period of emergency that followed deflation of the speculative market were seen today by President Hoover. The President said the reports to the Cabinet showed the tide of employment had changed in the right direction.” – News dispatch from Washington. January 24, 1930 “Trade recovery now complete President told. Business survey conference reports industry has progressed by own power. No Stimulants Needed! Progress in all lines by the early spring forecast.” – New York Herald Tribune. March 8, 1930 “President Hoover predicted today that the worst effect of the crash upon unemployment will have been passed during the next sixty days.” – Washington Dispatch. May 1, 1930 “While the crash only took place six months ago, I am convinced we have now passed the worst and with continued unity of effort we shall rapidly recover. There is one certainty of the future of a people of the resources, intelligence and character of the people of the United States – that is, prosperity.” – President Hoover June 29, 1930 “The worst is over without a doubt.” – James J. Davis, Secretary of Labor. August 29, 1930 “American labor may now look to the future with confidence.” – James J. Davis, Secretary of Labor. September 12, 1930 “We have hit bottom and are on the upswing.” – James J. Davis, Secretary of Labor. October 16, 1930 “Looking to the future I see in the further acceleration of science continuous jobs for our workers. Science will cure unemployment.” – Charles M. Schwab. October 20, 1930 “President Hoover today designated Robert W. Lamont, Secretary of Commerce, as chairman of the President’s special committee on unemployment.” – Washington dispatch. October 21, 1930 “President Hoover has summoned Colonel Arthur Woods to help place 2,500,000 persons back to work this winter.” – Washington Dispatch November 1930 “I see no reason why 1931 should not be an extremely good year.” – Alfred P. Sloan, Jr., General Motors Co. January 20, 1931 “The country is not in good condition.” – Calvin Coolidge. June 9, 1931 “The depression has ended.” – Dr. Julius Klein, Assistant Secretary of Commerce. August 12, 1931 “Henry Ford has shut down his Detroit automobile factories almost completely. At least 75,000 men have been thrown out of work.” – The Nation.
Flamed Diving wrote: » And Keynes solved it. Not that I back his policies, but I think you are against them. Why?
silverharp wrote: » what I dont like about the Keynes approach is that the economy can be managed in a way that that is consequence free. Take for example 2001/03 in the US, The FED made it their business to reflate the economy (it is their mandate), my approach would have been to let the market find its own bottom, let people build up their savings and a new business cycle would happen in any case. Had the US been allowed to have a harder recession we would not be in the situation now where the global system is on the verge of collapse. As the system is what it is all I can do is get the popcorn out and watch the car crash unfold. Otherwise take a spin back a year or two and listen to the assessments of Greenspan and Bernanke , it sounds like nonsense now remember "sub prime is contained". If you want my definition of voodoo economics it is saying that a country can borrow its way to prosperity and when it goes wrong the solution is more borrowing. Edit You could fill a book with these wonderful quotes "The truth is that Fed governors, together with their crack staff of Ph.D economists and market analysts, are as close to an economic dream team as we are ever likely to see." - Gregory Mankiw, Harvard economist and textbook author, New York Times, December 23, 2007
book smarts wrote: » So, to summarise, nobody knows when the recession will end. To prove I know what I'm talking about I will pad out this statement with obfuscatory jargon to confuse the reader, and scare them into thinking they are ignorant. If they question anything I say I will immediately brand them an idiot, and tell them to come back when they have a PhD in Economics. How dare they question an expert!
Économiste Monétaire wrote: » I don't agree with the point of letting the market find its own bottom in our situation. A recession isn't as simple as people assume it to be, some kind of 'give it time, it will work itself out'. Effective demand will fall--the excess supply does not create its own demand. It's the Fed's mandate to mitigate the business cycle in a case like this, which is done by instigating inflation. I won't spend my money, so I hoard cash, effective demand continues to fall in a cycle pattern. Make it worth my while to spend money because in a years time that money will be worth less (expected inflation has tanked over the last few months). That breaks the cautious cycle. Crude, but effective. Obviously, they should be just as willing to initiate a recession when you have excess. Something which they failed to do between '03 and '07, one could argue.
Économiste Monétaire wrote: » Japanese demographic factors, which contributed to their "growth recession," are eerily like that of the U.S. As a baby boom generation coming to retirement in the next 10-15 years, they have been hammered with direct equity and 401k losses. It's completely understandable that they want to spend nothing. Being over-cautious, however, isn't good for anyone. I'm sceptical of these public works programs being viewed as the end solution, as you appear to be too.
Économiste Monétaire wrote: » Also, we have no way of knowing whether a fatalist stance, of "we need to have a long recession to root out the bad," would solve anything--I follow Krugman on that. Keynes observed the, apparent, ineffectiveness of monetary policy,
Économiste Monétaire wrote: » Americans were saving money--at least, they thought they were. The graph that one is usually presented with does not include capital gains from property. Analogous to Ireland. The perceived level of saving, gained from on-paper capital gains, unravelled much to the contrary of, people's previous assumption that, housing could not fall in value. People will go back to more conservative means of saving, i.e. buying their government's bonds (to fund their deficits) and deposit accounts (I'm not oblivious to the irony of stating that banks are a safe bet in the current climate ).Edit: More on topic; The recession will end whenever the Fed (also the BoE, and possibly ECB) can embed the perception of expected inflation. As a small open economy, our hopes are pinned on our trading partners. Also, if the banking situation snowballs into a far worse problem, then recovery will depend on the length of time it takes policy makers to set up a "bad bank," following the Swedish solution.
silverharp wrote: » My opinion is that creating inflation is not a sustainable a way of creating wealth and it is a stealth tax on the lower and working classes. I'd be curious what Keynes would make of it all now, he didnt have to contend with floating exchange rates and I'm sure he hoped that at some point a gov. following his ideas would actually pay the debt back during the following upturn. I think he would go very pale if he was shown the private and public debt % that now exist around the globe. As you've mentioned the business cycle what irks me is that all market participants seemed to have left their brains at the office door, I dont think this was a regulation problem per say but more the “fog of war” caused by a deliberate policy of inflation and apparent back stopping by central banks. This led to mal investment which by definition must have to be written off before progress can be made.
silverharp wrote: » This is a real problem, a generation of Americans have lived on the basis that they could trade down and cash in on property and 401K gains, they must cut back on credit and make decisions based on their new reality. The peak earner category(44-55 year olds) goes into decline from about 2010. The US consumer appears to have to roll over and take a nap. Longer term this is very bearish for equity markets , it would seem difficult to maintain high prices when generationally there would appear to be more sellers then buyers for years to come.
silverharp wrote: » What you call fatalist is also an opportunity for business to reorganise , take for instance the US auto makers , you would agree that an efficient doestic Auto sector would be better for US inc. Assuming that you agree that they had lost their way compared to their competitors as they seemed to depend on “creative” financing, then the free market approach would have broken up these doggies years ago, the surviving entities would be profitbale and would be able to invest in an efficient manner. On a personal level “tricking” the population into taking on more debt is not a sustainable solution, it reaks of short termism where the cure maybe worse then the desease. The other problem with intervention in the markets is that the longer term consquences are not knowable or controllable , to me this is hubris on the part of state planners, and until proven otherwise I will continue to be cycnical of their proposals
silverharp wrote: » I agree the gains were an illusion and when you stand back it seems idiotic to think that people buying and selling property to each other at increasing prices could ever be deemed to be called saving. I would class this as part of the “fog of war” point I made above in that inflation policies “confuse” the market. I cant agree with your last paragraph, it is also possible to have an inflationary recession. It seems like too much has happened for this to be turned around on the basis that they scare savings back into the markets or into the shops. From a market perspective I would call a bottom when P/E ratios get down to about 10 or 12 or when yields on property go up to high single digits, which is simply another way of sayig that affordability has to come back to the market.
Économiste Monétaire wrote: » Inflation does have a nice side to it. In a time like this debt default is a problem. However, not just for the dogs of the market who, I suppose in some Darwinian way, should go bankrupt, but the knock on effect will be greater default of good companies now unable to service debt at a lower price level. Just a thought.
silverharp wrote: » you get into the issue of what is a good and bad company. Taking a simple example of someone that say set up say a new restaurant in Dublin in 05. he maybe good at what he does but assuming hes loaded up on debt based on 05 lease prices, do you class such a company as good or bad? It would seem that a good company in this environment will be the one with the least amount of debt. More generally it looks like we are in a secular period of deleveraging, I can almost guanantee that you will never see the existing home lending standards and institutional leverage for decades to come. As this unwinding has only just begun, from a market perspective there is at least 2 or 3 years left of unwinding for he market to chew through. How effective will any stimulous package be under these conditions? apart from arguing that that it would be worse if nothing was done, maybe but I still see asset prices falling in a similar fashion to Japan , the only question is how long will the process takes, and what effect throwing the kitchen sink at this will do to the bond market. At the moment the gov's can borrow at under 5%, what if this becomes 10-12% or higher?
