In the last week, the Dow dropped $1,323, today $634 http://goo.gl/hmBUB .. these are the worst numbers since Dec 2008.
Interestingly enough, the US Treasuries were "up" .. i.e. the interest rates dropped which indicates a very strong bond market. So "the market" disagrees with S&P. Another interesting point: S&P has been one of the poorest rating agencies, giving very healthy scores to the banks that were heavily invested in the credit default swaps and other financial instruments that got us into the mess to start with. And there are many questioning the rating agencies in general, they just have a very, very poor records of predicting safety, their job. The markets themselves still much outperform them. To tell the truth, I am a bit of a conspiracy theorist re S&P: I just gotta think they have "sold short" the US economy. Oddly enough, our financial situation is pretty good, with strong industrial capitalization and a reasonable national economy in terms of debt to GDP ratio. Our growth is poor due mainly to understandable caution, both in banks to lend and for industry to invest. Looking at out political system, I am not surprised. I guarantee the biggest winners in this will be investors, especially "value investors" like Warren Buffet. When the markets plunge, a lot of companies are way under valued. I've seen this at play with three fund managers I know. One looks at management strength and healthy market for product. Another literally looks at the company assets and values them against liquidation. (Sounds ghoulish but is apparently an effective metric for valuing companies). The third is an expert in small-cap companies which always get hammered in these situations and if they survive, they slowly regain their value. Trust me on this, the smart professional investors will do very well indeed. But more important than us, there is strong indication that europe, not the US is at the heart of the problem. The euro debt is likely to keep being problematic until there is a truly unified euro. The current situation is like each state of the US having their own currency, but pegged to a fictitious euro-zone wide economy. Each euro-zone state/country lacks the power to manage their own currency (i.e. float inflation, print money) but they have a fiction of being a single currency. Unfortunately, a unified euro zone is far too politically unified for comfort (can you imagine Italians, French, and Germans literally being unified?) and thus very unlikely. I'm far more concerned about that than the current US mess. I just don't think a monetary union without a political one will work, at least for europe. Way, way too diverse. But, closer to us all, we have all had our net-worth reduced in the neighborhood of 15%, some claim 20%. We are far too integrated to say "but I don't have stocks" or similar naive views. Nope, we're all on this bus. So in sum, yes Doug is right, a flock of insane T party jerks tipped the boat too much and the world caught on that we are just not trust worthy. And Obama is just too weak a president to confront them. He really should have used his constitutional right to guarantee our debt. But that was just a tipping point, the systemic problems are real. And europe failing will be just as bad for us as for themselves. We really are all on the same bus and no one at the wheel. -- Owen On Mon, Aug 8, 2011 at 8:45 PM, Victoria Hughes <[email protected]>wrote: > They dropped 600 and came back up. > > > > Tory Hughes > [email protected] > > > > > On Aug 8, 2011, at 8:00 PM, Douglas Roberts wrote: > > Dow futures are already down 263. It's going to be ugly again tomorrow. > > On Mon, Aug 8, 2011 at 7:58 PM, Douglas Roberts <[email protected]>wrote: > >> I'm staying at the Chico Hot Springs Hotel in Montana tonight, where the >> wireless access is iffy, at best. >> >> My take: we're fucked globally, for a while. Think the 2008 recession >> and I suspect we'll be in the ballpark. >> >> >> On Mon, Aug 8, 2011 at 7:52 PM, Victoria Hughes >> <[email protected]>wrote: >> >>> Strong opinions stated twice. I did not vote for the Tea Party. >>> What's your take on this as a global situation? >>> >>> >>> >>> Tory Hughes >>> [email protected] >>> >>> >>> >>> >>> On Aug 8, 2011, at 7:10 PM, Douglas Roberts wrote: >>> >>> My nickel: we're fucked. Incompetents are running the country, because >>> the system encourages incompetent ass-kissing, yes-men to rise to the top: >>> we get what e voted for. Enjoy. >>> >>> --Doug >>> >>> On Mon, Aug 8, 2011 at 6:51 PM, Victoria Hughes <[email protected] >>> > wrote: >>> >>>> Like many of us, I have been reading a wide range of opinions online >>>> about this, and had been looking forward to the discussion here. >>>> >>>> So what's the sense here? >>>> >>>> My nickel: despite the gloom and doom, the prophecies of the final >>>> demise of the middle class, the unbelievable behaviour by the Tea Party >>>> folks- petulant, arrogant and childish behaviour- overall I am heartened by >>>> the necessity that we attempt to think like a global culture in order to >>>> resolve and upgrade how we operate. >>>> Similarly to the weather: we finally have to confront that this is all >>>> one planet, like it or not: there is nowhere else to go. >>>> >>>> Our engagement now with these two situations - global economics, global >>>> weather - I think will be seen as our watershed moment in a couple hundred >>>> years. I am a designated optimist, so there's that. However, the demand >>>> right now that we work together requires accountability from everyone to >>>> everyone, no one left out anymore. We are overdue for this. I wish it >>>> weren't happening while I was around, but I am around. >>>> Keeping the big picture in mind, not yielding to panic, and reminding >>>> people we've been through difficult times before. >>>> >>>> Stronger opinions re China and the US/West's addiction to their cheaply >>>> made merchandise and to consumerism (especially after Sarbajit's comments >>>> re >>>> cell phones), and the Tea Party will wait until I see if anyone picks this >>>> thread up. >>>> Yes, I read Tom Friedman. >>>> >>>> Victoria >>>> >>>> ==============================**============================== >>>> FRIAM Applied Complexity Group listserv >>>> Meets Fridays 9a-11:30 at cafe at St. John's College >>>> lectures, archives, unsubscribe, maps at http://www.friam.org >>>> >>> >>> >>> >>> -- >>> Doug Roberts >>> [email protected] >>> [email protected] >>> http://parrot-farm.net/Second-Cousins >>> <http://parrot-farm.net/Second-Cousins> >>> 505-455-7333 - Office >>> 505-670-8195 - Cell >>> >>> ============================================================ >>> FRIAM Applied Complexity Group listserv >>> Meets Fridays 9a-11:30 at cafe at St. John's College >>> lectures, archives, unsubscribe, maps at http://www.friam.org >>> >>> >>> >>> ============================================================ >>> FRIAM Applied Complexity Group listserv >>> Meets Fridays 9a-11:30 at cafe at St. John's College >>> lectures, archives, unsubscribe, maps at http://www.friam.org >>> >> >> >> >> -- >> Doug Roberts >> [email protected] >> [email protected] >> http://parrot-farm.net/Second-Cousins >> <http://parrot-farm.net/Second-Cousins> >> 505-455-7333 - Office >> 505-670-8195 - Cell >> >> > > > -- > Doug Roberts > [email protected] > [email protected] > http://parrot-farm.net/Second-Cousins > <http://parrot-farm.net/Second-Cousins> > 505-455-7333 - Office > 505-670-8195 - Cell > > ============================================================ > FRIAM Applied Complexity Group listserv > Meets Fridays 9a-11:30 at cafe at St. John's College > lectures, archives, unsubscribe, maps at http://www.friam.org > > > > ============================================================ > FRIAM Applied Complexity Group listserv > Meets Fridays 9a-11:30 at cafe at St. John's College > lectures, archives, unsubscribe, maps at http://www.friam.org >
============================================================ FRIAM Applied Complexity Group listserv Meets Fridays 9a-11:30 at cafe at St. John's College lectures, archives, unsubscribe, maps at http://www.friam.org
