We have lost control
 

Super may just get his wish. everybody in the world will be equally POOR. The Subprime debacle and the ensuing loss of liquidity in the financial system may just bring the whole house down. The Fed can only push interest rates down so far and the $ can only go to zero. The ramifications are just off the Richter Scale. The perfect storm is brewing.

There simply is no investment vehicle that won't be effected. I suppose Gold and precious metals would be ones only salvation.

History may write that 911 was the catalyst that brought it all down. After 911 the Fed was forced to inject liquidity into the system to keep the cahs flowing and the wheels turning. Then the inevitable greed set in which caused the system to crash upon the reef of ill liquidity.

The situation is basically thus. The US is involved in a costly war which it is not using capital to fight, The US has hugh defceit spending which is driving the credit worthiness of the US down. In the face of that the Fed is pushing interest rates down to keep the credit system liquid because of the excesses in the sub prime loans and the collateralizing of that debt. As a result the $ is declineing in the face the of US reduced credit rating and lowering of US interest rates. Oil prices are higher because of an increase of tension and risk in the oil producing regions of the world.

The question is how large is the sub-prime loan situation and the further collateralizing of that debt in relation to the size of the world economy? How many other loan obligations will become ill liquid as collateral damage to the sub prime.

One can only push on a string only so far before it becomes ineffective and the system seizes up. If the system seizes up no more cash flow.

Can this happen, probably not, but the risk of a catastrophic failure of the system is greater now than at any time since the Great Depression of the 1930s. I would say roughly a 20% chanch. My range is 15% to 35%. what saved the US during 911 was the speed in which the US financial system was able to shut down and provide a cooling off period.

i hear Walmart is having a sale on stuff. Lots of stuff. We should go.

It sure was a great idea to clobber those terrorists in Iraq. for national security.

Super one can count on you to snatch defeat from victory. Iraq ain't the reason for the seizing up of the financial system. Your assets will simply become unsellable at any price. Stocks, Bonds, Cash, RE all worthless. Pension Funds....insolvent, Fed insolvent, US goverment insolvent. World economy a thing of the past. Hurray Islam wins the day as the West self destructs under the weight of its own excesses.

20% chanch...

It's like waking up the morning after a wild drunken orgy and then realizing everyone else at the party had AIDS.

I agree w/ tabs. Way too much speculative stupidity surrounding RE in the last few years. COMPLETELY unsustainable, yet everyone kept bending rules, common sense and time-tested wisdom to artificially sustain it since it just felt so damn good.

Whoops.

Hangover time.

It's going to be very interesting to see just how deep this rabbit hole goes. Virtually every bank and financial institution in the world ate of the poison fruit. Which ones will die and which will just get sick remains to be soon.

I'd put the chances for a large, 1929-scale event at 20-30% and the odds of a decade-or-so-long deep and prolonged recession at about 50%. This whole thing has been absolute stupidity since Day #1.

And housing prices are still 20X gross annual household incomes in some places. This is going to sting for a lot of people.

15-35% 20-30% Any more guesses?

Get some balls! Unless it's over 50% (a coin flip) your 'crystal balling' is meaningless!

My guess is MUCH more precise! After much study ...I'm going with 12.89857287899587788 %! Beat that.

you guys make wussy predictions. In a public talk last year I predicted that by 2026 over 50% of US colleges and universities would be bankrupt and close their doors.

I'd say 75% chance we are in a deep recession by the end of 2009. It will last until at least 2015.

No, no, no, no. Remember the world is going to end on Dec. 21, 2112. The Mayans said so. Or at least that hippie dude down at Venice Beach that claims to know and understand the cosmic nature of the Mayan calendar said so when we got to talking about it.

So I toked one up with him and afterwards it didn't seem so bad. It was all pretty weird really.

My 15% to 35% is a Global economy collapse...The US is the linchpin of the whole dang shootin match..as the US goes so goes the world. A hiccup in America is felt around the world. Or is this the REAL Bush agenda to get even with those uppity rag haed b@stards? If it is its workin real fine and GW is to be commended and not pilloried.

Two legs of the Global economy are in play and at risk. Weakening $ and lower interest rates to keep the system liquid. I have never seen this before. At some time pushing on the string won't work anymore and at that time events will overwhelm the tools used to right the situation. Then a mere gust of wind could capsize the ship.

What, that's great, all this time I thought it was 2012 and was spending all my money. Now I am in a mess.

tabs:

You took this long to come to this conclusion?

I would disagree in part about the invasion of Iraq not being in part at fault for the economic meltdown. Instability in the Middle East has been heightened and the price of energy affects the cost of just about everything. Where are all these dollars going? In whose hands are the billions extra we pay for this energy? Granted, others are competing for the same resources, but that is only part of the equation. Your post goes very well with the other thread "How long do we have?". The deficit has been pooh-pooed by so many on this BB as well as so-called "experts" I love watching Whats-His-Name who, even today, said the American economy is "The greatest story never told". How much do we pay annually in interest on all that borrowed capital? Where are the leaders of industry when it comes to paying for the war? "Don't raise OUR taxes. We pay enough". Well, if they believe in the mission, why are they not willing to sacrifice in order to keep it going? Lemuel Guliver would have a field day visiting his strange land and trying to fathom the logic under which it operates. And, P.T. Barnum could make a fortune selling his services to Washington.

Why does this thread make me happy that I own an AK-47 and 1500 rounds of ammo?

Do not forget the primary rule of a survivalist.

Keep one round for yourself.

why does big 5 sporting goods not have ammo on sale during the holidays? just thought id ask.

T$

Have any of you checked the price for ammo lately...its all going to Iraq

As is lumber, concrete and just about every building product. Makes DIY a lot more expensive.

Anyone notice Citibank getting a cash infusion from the Arabs today for 7.5 billion? Do you suppose they have more than an liquidity problem? Maybe an insolvency problem? This will be very interesting if that bank goes down.

7.5 B is chicken feed to Citi....

Problem is that the US is selling off its assets piecemeal every time a crisis comes along. Its called redistribution of the wealth...from the USA to all the others...who have our $$$$.

Not only that, but the price Citi had to pay for that money was astronomical.

Citi itself is now a subprime borrower?

The sky is falling! The earth is falling! We're ALL going to die! The END is near!

I note that the squirrels are hiding acorns...that's a sure sign.

The squirrels won't be the only ones looking for hollow trees to live in if many more of these foreclosures continue.

And all the signs are they absolutely will.

Ok, this is like the third time in a couple of weeks that I'm getting blamed for something, and I'm getting pretty sick and tired of it. :mad:

Seriously though, I'm up a little at this point for the year and am wondering if I shouldn't go to an all cash position. I'm in mutual funds that are pretty diversified and yet they all go up, or they all go down on a given day. Down 10% from a few weeks ago, but up a bit for the year. Should you sell the ones that have done well and are up or the ones that are down? If the sell the ones that are down, you definitely lost money. On the other hand, they may be headed in a more southerly direction. Damn, I don't know. I'm keeping the proceeds from the sale of the DB4 in gubmit insured CDs for now.

RE: Citibank
The Dow took the news hard. UP 215 points yesterday.

So ... is everyone just 'whistling past the graveyard'?

tabs,

You need to cut down on your Schopenhauer.

I agree w/ Tabs, our leaders, both elected and corporate, and policy makers are now and have been living in a fantasy land for decades. The spend money they don't have, make policy that is crafted to one special interest or another, buy their seats w/ tax dollars, and can't see beyond the next election or board meeting. Their dream is to be golden parachuted out when the ***** hits the fan. Not one of the corporate/government leaders responsible for the subprime mess is going to be inconvenienced a whit by it.

Some sort of malfeasance that happened w/ Chevron, Enron, Global Crossings, S&L debacle etc etc etc.

well well well looks like Tabs was ahead of the curve....The Bear Stearns bailout was the edge of the abyss...and the Fed did the right thing to pull us back before we all fell in...

That's really hard to believe with the MASSIVE tuitions they charge, let alone the money their athletic departments bring in.

Having a Division IA school is like owning an NFL team with the ticket revenues and merchandise sales...and with no Player salaries to boot.

We should have attacked Canada instead.

1) They are closer.
2) There are only 30 million of them.
3) They were just as responsible for 9/11 as Iraq.
4) They talk funny.

Well at some point the mortgage companies will start to fire-sale off all these properties they're holding, which will give many people a chance to really get into a great home for a price they'd have never even dreamed possible.

5) We get 85% of our oil from them.

We did attack Canada once of course, in 1812. Damn british, ****ed it up for us all.

They're only special interests when they're not your interests.

tabs, if you push on a string nothing happens, you pull a string, and push your luck.

The economy will crash within 6 months if the Dalai Obama is elected POTUS, al the monetary gymnastics that have been done the last 20 years have only postponed the fall and allowed the bubble to grow in size. When it pops, it will be bad all over the world

It's not too late...

1) Get out of Iraq.
2) Reduce capital gains tax.
3) Reduce domestic corporate taxes.
4) Develop a comprehensive energy program.

(OK, it's too late...)


.

Why....that is not being a good CA citizen, you sound so soo sooo UN LIBERAL...banish you from the fair City of OZ by the Bay. Deny you from the pleasure of its existence...exile you out of the state of paradise to...Nevada or worse...

There is someplace worse than Nevada?

Currently, the forclosure rate is way up.

But 94% of mortgages are being paid as agreed. On time. In full.

Some lenders have a large percentage of the remaining 6%, and are in deep doo-doo.

Other lenders are still healthy.

The current mortgage "Crisis" will not bring this great country down. But the deficit and falling dollar might.

Yes, but foreclosure rates are still increasing at a truly alarming rate. The crisis is still spreading and worsening it seems.