Forget central bankers. They’re out of juice. If we’re going to get a global economic recovery, it’ll have to start with massive amounts of government fiscal spending.
Market Roundup
That’s not me talking, by the way. That’s the Organization for Economic Co-operation and Development (OECD), a pan-national research group based in Paris. It has an annual budget of more than $400 million, and like the International Monetary Fund (IMF), its mission is to advise high-level policymakers around the world.
In a strongly worded forecast released today, the OECD warned that “trade and investment are weak” … “financial instability risks are substantial” … and that a massive government response is “urgently needed.”
It also slashed its growth forecasts for the U.S., Japan, and Europe and all but begged for policymakers to do something. The money quote:
“Governments in many countries are currently able to borrow for long periods at very low interest rates, increasing fiscal space … Many countries have room for fiscal expansion to strengthen demand. This should focus on policies with strong short-run benefits and that also contribute to long-term growth. A commitment to raising public investment collectively would boost demand while remaining on a fiscally sustainable path.”
The report also implicitly admits that central banks can’t “save” the world anymore. Or in dry econo-speak, “Experience to date suggests that reliance on monetary policy alone has been insufficient to deliver satisfactory growth.”
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| Can government do enough to spur demand and production? |
There’s just one problem with all of this. Large-scale economic stimulus isn’t even on the drawing board, much less in practice. Not in many parts of the world, and certainly not here in the U.S. Widespread disappointment remains over the ROI from President Obama’s Great Recession-era spending program. And none of the current presidential candidates are talking about launching huge “shovel-ready” stimulus programs the day they get into office.
Ironically enough, it would probably take sharp stock market declines or a deep recession to provoke Congressional or presidential action. Alternatively, the Federal Reserve and its counterparts in Europe and Asia could come out and say, “We’re done. The ball is in your court now.” But in this era of overly aggressive, anything-goes monetary policymaking, that just isn’t going to happen.
| “It would take sharp stock market declines or a deep recession to provoke action.” |
Long story short: The OECD is projecting weaker and weaker growth … and its proposed solution has no chance of happening. If that’s not a reason to worry about stocks and other risk assets, I don’t know what is.
Now, let me hear from you. Is the OECD right? Is the only solution to the weak global economy a massive amount of pan-global government spending? Can central banks help the matter, or are they out of juice? Is a recession baked in the cake, and coming no matter how policymakers respond? These are important questions for stock market investors like you, so please take some time out to answer them.
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Stocks suffered their worst start to a year ever in January … but in the past few days, the Dow Industrials have tacked on almost 1,000 points. What gives, and what’s coming next? Several of you weighed in on that topic and what you’re watching now.
Reader Steven said he’s keeping an eye on the action in the bond market. His take: “I’m watching the 10-Year Treasury rate very closely. The rate was down to 1.64% after being at 2.25%+/- for almost all of 2015. Now the rate is up 18 basis points in a move that is almost in tandem with the NYSE.
“It would appear that the large-scale investors are looking for the mule that will pull the cart the fastest and the longest (and possibly the cheapest). I would expect measured volatility during the next six months, with stocks and bonds riding the proverbial seesaw until one or the other collapses. I would be VERY careful where you put your investment, and I would NOT go long term on anything until after we find out what kind of president we will have.”
Reader Ed suggested stocks have a lot further to fall because profits don’t justify current levels. His comments: “Since current earnings do not even remotely support even a 12,000 Dow valuation, what has really changed since the Dow was over 18,000? A bubble is a bubble is a bubble. And, eventually ALL bubbles burst or deflate in a slower manner to the level of their value.”
Reader Chris G. said political uncertainty is helping create market uncertainty: “In an election year where there are serious differences between the candidates, and the lead keeps jumping between people and parties, the only sure thing is uncertainty. Volatility is the only winner for 2016.
“Investing? Buy a little more of your long-term favorites on big dips, and mostly just keep your powder dry until the dust settles this November. Trading actively? Be on your toes, and don’t hold anything for long.”
When it comes to specific stocks and sectors, Reader Chuck B. said weakness in a particular group of stocks is a worrisome sign: “I notice that the share prices of many REITs, MLPs, BDCs, and other investment companies have fallen sharply, even as they often report earnings that support dividends of over 10%, even 20%. This can’t stand.
“Either their earnings must suddenly drop sharply, killing those big dividend payments, or the stock prices must recover to bring P/Es and dividends into more rational levels. In a generally deflationary environment, you know which I think will happen.”
Finally, Reader Tom R. said he still sees a couple areas of opportunity: “I got out of stocks completely over one year ago and concentrated on options trading. About four months ago, I got completely out of options except for gold, silver and derivatives of those commodities. I’ve done very well, up over 50% in four months.
“If I had a ton of money, I would put some of it into physical gold and silver. But given the leverage that options trading based on these commodities provides, it seems to be a no-brainer. As the European Union experiment unwinds, gold will explode in value.”
Thanks for all of the insights. It’s interesting to me that stocks have rallied, but that the Japanese yen, gold, Treasuries, and other “risk off” assets are holding the lion’s share of their January and February gains. Unless they start to break down, confirming the advance in stocks, this move will continue to look like just another oversold bounce – the kind we saw time after time in the last bear market on the way to lower prices.
If you have additional insights to share, please take some time out to post them in the discussion section.
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Chinese companies are going shopping here in the U.S., with the latest deal being a $6 billion purchase of technology supplier Ingram Micro (IM). The purchaser is Tianjin Tianhai, a company that’s part of a larger conglomerate known as HNA Group. Other recent Chinese acquisitions include the $44 billion purchase of Syngenta (SYT) and the $5.4 billion purchase of General Electric’s (GE) appliance division.
First, Iran said it wouldn’t commit to freezing production as part of OPEC’s latest oil price plan. Now, Iraq has done the same thing. While both countries say they support the idea, it’s going to take concrete cuts to give the recent bounce in crude oil any legs. We’ll have to see if the deal holds together or not.
Wal-Mart Stores (WMT) warned that sales will flatline this year, rather than rise to 4% as it previously expected. The company blamed the strong dollar and the closing of disappointing stores. It’s planning to shutter 269 outlets worldwide.
Stop the insanity! A developer wants to build a 73-story apartment tower in Brooklyn, one that would be twice the height of anything else in the New York City borough. Several record-tall towers have already been built or are under construction across the East River in Manhattan.
It’s worth noting that thousands of units have already been built in Brooklyn and more are under construction or in the planning stages — and that rents are already starting to slip thanks to the burgeoning supply glut. This process is playing out in several other parts of the country as well — a key reason I’m concerned about the outlook for Real Estate Investment Trusts (REITs) in general, and apartment REITs in particular.
So what do you think: Is New York getting overbuilt, and are other metropolitan markets in similar trouble? What’s holding Wal-Mart back? Will the OPEC deal hold together, or fall apart thanks to cheating and non-participation by several countries? Let me know your thoughts in the comment section below.
Until next time,
Mike Larson
P.S. CNBC regulars Boris Schlossberg and Kathy Lien created Global Currency Investor for one reason only: To help you go for your share of the enormous profits that are available to you in the currency market.
And next Tuesday, they’re presenting a LIVE briefing on this dangerous — and extremely exciting — situation for members only.
But this one time — and one time ONLY — they feel it is critical that YOU hear what they have to say.
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All we ask is that you click this link to tell us you’re coming so we can make sure we have enough bandwidth to accommodate everyone.
Recommended Articles by Mike Larson:
Mike Larson graduated from Boston University with a B.S. degree in Journalism and a B.A. degree in English in 1998, and went to work for Bankrate.com. There, he learned the mortgage and interest rates markets inside and out. Mike then joined Weiss Research in 2001. He is the editor of Safe Money Report. He is often quoted by the Washington Post, Reuters, Dow Jones Newswires, Orlando Sentinel, Palm Beach Post and Sun-Sentinel, and he has appeared on CNN, Bloomberg Television and CNBC.
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HELICOPTER MONEY!
Yep!!!
Because giving 95% of the wealth to the top 1% isn’t working out
Trickle down turned into a flow upward.
Count de Money: Your excellency the people are revolting….
King Louis XVI : You said it. They stink on ice!
Exactly! Same thing happened before the 1930 depression and the same negative political party was calling the shots…or should I say, causing the chaos. Supply and demand has to be in balance. If you cause low wages, they cant buy products, except necessities. So government has to do they buying (which is not even done in a smart way…that would actually help people). All money has flowed up. REAL demand happens with decent wages and benefits.
it’s working out for them
The peak of the full moon will be
Monday February 22 at exactly
13:20 Eastern Standard Time
The world hangs it the spectre of fear of the unknown, and this the insulting frustrating kills for low volatility is not entirely between high and medium
me agree too. medium rare
The government cannot give to anybody anything that the government does not first take from somebody else – you cannot multiply wealth by dividing it.
Lifestudent38
Agreed, we must find a way of working for it.
Howard and Lifestudent38
Well lets get out the picks and shovels and start sprucing the country up. Infrastructure is falling apart water lines are contaminated. You say people must find a way of working for it so here it is. Manual labor. We are not all Bill Gates and Warren Buffetts there are so many that depend on society for a hand up. But with all the greed in the world today its every man for himself and leave your brother behind. All these GOP talking heads have done is stated how they will increase the deficit not reduce it but I guess we are way way beyond reducing it. Yes the news media is full of goodies today governor to sue Planned Parenthood, somebody suing T Cruz because he is not an American Pope says that Trump is not a Christian (what a zinger) the Pope making a statement like that. Then the Pope blows his cool (showing his darkside we all have one) Then the OCED throws in their two cents worth and Harry Dent says the recession has already started. Maybe I will just go back to sleep and see what tomorrow brings.
“Free people aren’t equal. Equal people aren’t free.” Jim
Make the pie higher
They have created money to the tune of over 7 trillion dollars in the last decade.
They have created “CREDIT” not money.
JP. Morgan defined money thus:
“Gold is Money, everything else is Credit”
So they created Credit and are now indebted for $7 Trillion.
I find old adages to be very insightful. So at the time that gold was still the basis of money and inflation was non-existent, there was an adage,
“If you owe the bank 100 thousand, You don’t sleep,
If you owe them a million, the Banker doesn’t”
Heh… we’re possibly reaching the level where bankers shouldn’t be able to sleep in these inflationary times?
Problem is in believing that all are answers are wrapped up in “forward thinking ” we do err, so few look at history to comprehend those things that worked and what didn’t. It appears to me that we continually repeat the same mistakes over and over again. Look at what happened before “the great depression” about a decade prior we had a deeper financial collapse and Calvin Coolidge allowed the market to correct itself. It was bad but only lasted 18 months or so ending in one of the greatest economic growths the Nation has ever seen. Then, when we over dpent ourselves again, another collapse happened known as the “great depression ” which was greatly prolonged by Government intervention. Some experts say it was extended 10 years. But wait, lets do it again. How’s the saying go? “the definition of insanity is to do the same thing over and over again while expecting a different result.” So here we go again, but this time it will be much worse.
Voila! In view humble vaudevillian veteran, cast vicariously as both victim and villain by the vicissitudes of fate. This visage, no mere veneer of vanity, is a vestige of the “vox populi†now vacant, vanished. However, this valorous visitation of a bygone vexation stands vivified, and has vowed to vanquish these venal and virulent vermin, van guarding vice and vouchsafing the violently vicious and voracious violation of volition.
The only verdict is vengeance; a vendetta, held as a votive not in vain, for the value and veracity of such shall one day vindicate the vigilant and the virtuous.
Verily this vichyssoise of verbiage veers most verbose, so let me simply add that it’s my very good honour to meet you and you may call me V.
Yeah I loved that movie Vendetta to. Very Very ventertaining. A little levity if you please maestro.
I must say that there are a lot of infrastructure projects in the US that could spark economic activity and yield some good profits for the future; public transportation, roads and connectivity come to my mind. However, from Bush to Obama the debt has grown from $ 10 billions to almost $ 19 billions. Where did the money go? But it’s going to be difficult to add more. What worries me is that the republican candidates seem very willing to pile up more for the military.
Fabian
Most candidates just want to offer us more of the same. A proposition which says what we’ve been doing for the last 20 years or more hasn’t worked, but let’s keep going with the same tired old formula. There are faults on both sides, that’s why some believe we need a rout.
Two wars we didn’t pay for ring a bell? On top of changing regimes in Libya, Syria, Yemen, etc., we spend $660 billion a YEAR on the military and you don’t know where the money went? I haven’t even got to Bush tax cuts and privatizing everything Rethugs can get there grubby little hands on.
This is what happened to Germany when the Kaiser bet the farm on WWI. Germany had
yoooge debts even without the reparations.
1918-1923 was such a train wreck that a beer hall putch in munich almost succeeded.
It can’t happen here….
I will build a wall and Mexico will pay for it.
The irregular militia will man the border and
collect yoooge tarrifs on ALL Mexican imports.
Whoever promises to create a new cabinet post to make Trump secretary of infrastructure will win in a landslide and make america great again.
Your comment looses a couple zero’s somewhere. I think you meant to say trillions. Why is it difficult to add more debt?. Just keep the printing presses rolling keep slandering gold so no one invests their funny money there and everything will be OK. If more debt is to be piled up let it benefit the country not the corporation controlled war machines. Who looks good on the invasion horizon at present anyways? Ah Canada and all their fresh water and dirty oil after all fracking is only a short term solution well if there are any frackers left in a couple years after all their bonds go south. If your holding any fracking bonds I would get the frig out of them.
well Gordon first of all a countries debt to GDP ratio starts accelerating with rampant spending presently the U.S. has a debt to GDP ratio of 99.333% Obama in 7 yrs literally doubled the national debt even on CNBC they were saying once the united states debt gets to 22-23 trillion dollars were in the same shape as Greece except we don’t have a big brother or mentor to bail us out
Hawk,
It takes a lot of money to turn around the economy after a Republican Stock Market Crash and Depression…… Did in 1932 (Hoover) and did in 2009 (Cheney/bush)…
Agree 100%. Put money into the hands of middle class America (working age)…create jobs (that actually improve our country..not throw away..like the military budget)…they pay taxes…and they SPEND…which increases demand. It will also help businesses. It is the ONLY way to make it work. The government could have done it much sooner…but they threw so much money away. They can create REAL jobs that pay decent wages with good benefits…whose work is BENEFICIAL to our country at the same time. It is the only way it will work.
Hi Mike
The one thing that would save us is unity in our approach to the future and yet an issue of justice has surfaced to divide us. How we handle this as a nation with fairness, compassion and balance will define who we are as a nation moving forward. Nothing is more divisive than to seek unreasonable advantage over many others in the advancement of a cause. I hope as a nation we are better than this.
Howard
I really like your unity approach in the future and justice for all. I agree that it must be handled as a nation but it is now human nature to seek unreasonable advantages of others in advancing our search for more wealth. Every time you make money on a stock there is a loser somewhere. Yes some investors make money leverage money have good timing have the stones to borrow cheap money but not me. I would have made more money just stashing it in the bank over the years. I have watched physical money deteriorate over the years. Gold for a couple years now has been penned in by all the paper gold floating around and I am of the opinion it has been seriously manipulated from the London price strike on down. Governments, Wall Street, Hedge Funds hate it they cannot make the huge profits on it like they can on funny money. I keep looking back in history and gold seems to have a better track record than stocks.
mother nature is a bitch. If you can’t hack it you go extinct. no hand outs for political advantage.
oky i am agree
me agree too
Policy makers only see their own interests. More government intervention will only lead to more malinvestment.
Remind me again what ROI stands for other than Ruin Our Income?
the demise of Goldman Sachs would be a good start. unethical behavior pervades the entire firm-at least. criminal behavior is probably a better description of their business model.
But tnen where would Ted and Hillary get funds?
Your right Tony. The asset of evil.
The problem we have was caused by over spending by governments. Inflation is a devastating thing, yet the Fed want’s more of it. The market place is very competitive. everyone does what they can to hold prices down. Use robots and Import from where wages are low and cut corners every possible way to sell and stay in business. So why does the Fed want inflation? to help the government to service it’s debt.
They keep saying we need growth. But people don’t need all that excess stuff. Why should business invest more into making more goods and services when people don’t need it, and many don’t have the money to buy more even if they do need it? I don’t see an answer. We are in a jam and a severe recession may be the only thing to cure it.
Really is easy…… First withdraw from GATT and NAFTA, explain to Americans how our future depends on buying “Made In America” products, require American companies to return to the America, return Glass-Steagall to law, return taxes on the 5% to were they were in 1980 and return Military spending to where it was in 1980, use some of that increased revenue to rebuilt our infrastructure and deficits go down and life gets good again for the 95%, the economy improves and the stock market goes up based, not on rampant speculation but on real improving economics …….
Money goes where it is appreciated. Heavy taxes and government restrictions drove American money and manufacturing to less restrictive countries. Now, higher interest rates here, and government interference elsewhere are driving foreign money to this country.
You must be a yuge supporter of you know who
me support hillary
On oil production cuts: I can’t trust any committment (word of promise) of any Muslim country. Perhaps only Russia is serious of its committment.
This is only a baby step they do not wish to create a panic.
What is bad for Russia is good for America….. I’m betting to bottom will be closer to $10 oil
It is not good to have Americas’ domestic oil industry irreparably damaged. Doesn’t do much for our Canadian and Mexican neighbors either. I guess energy independence isn’t important anymore. Jim
energy independence is as forgotten as the idea of the yuan becoming the world’s default currency
in a way we already are energy independent. america can frack a new well faster than the saudis can ship a tanker full of oil across the ocean. oil coming in out of the ground while the tanker is still en route.
C’mon Gold. We use ten million more barrels per day more than we produce. We have lost a quarter of a million highly trained technicians and crews that will go on to other jobs and vow never to return. Where else but the oil business can you acquire high level skills and work long hard hours in unpleasant places only to be fired when a shiek sees his market share drop from 43 to 41 per cent. The shale producers are not profitable. They next wave will be the junking of our marvelous offshore fleets and support services. The Luftwaffe couldn’t do a better job of destroying a vital U.S. Industry. Jim
You think it’s bad now, just wait until our Saudi friends decide to accept currencies other than the dollar for their oil. Jim
no matter what currency anyone uses it will eventually need to be converted to dollars, especially the these countries are collapsing in front of our eyes.
you have to remember, the fracking has only begun. the break even is down to $30/bbl and still improving. i doubt offshore is ever going to be able to compete with that. i know you’re an oil guy, jim. you know things i don’t. but i’m a common sense guy. i got the oil story right over a year ago. i even had to convince you i was seeing the supply side of this when no one else did. what i see now is there’s gonna be a whole lotta frackin’ going on worldwide until this planet gets sucked so dry it will look like a raisin. by that time natgas will be fueling electric cars and no one will want saudi oil ever again.
im thinking 18-23 per barrel of oil
People who once dreamed of suburban houses are giving up the idea, and often giving up the idea of owning entirely – maybe because of high debt levels that preclude property ownership. They are often choosing to live in cities. Locally quite a number of downtown office buildings have been or are being converted to apartments. A 44 story apartment just got its financing and will break ground next month. A 48 story hotel/apartment building is going through approval, and several other projects are in the works. For those who do have money, 14 stories of condos have been added to a luxury hotel, and are already 30% spoken for. I think other cities are seeing similar trends.
And walmarts make great low income housing.
I am not aware of an organization known as the Organization for Economic Growth and Development. There may be one, but I think Mr. Larson means to refer to the Organization for Economic Co-operation and Development. The acronym is OECD and the organization is headquartered in Paris.
We have known since before the great recession that the banks could not save the world. The banks were the problem. Remember they were knowingly packaging mortgages which were worthless and selling them. They made the real estate bubble that burst. Banks exist seemly for bloated salaries for their CEOs and huge bonuses for the traders who sold the bad mortgages. The bonuses got cut during the recession, but that is about it.
Obama, at the urging of Paulson, Krugman and many other economists wanted to increase the bailout or have a second bailout, but the politicians would not allow that because they did not understand what was going on, and perhaps still don’t.
US quantitative easing tapered off beginning in 2013 and has since be stopped altogether. According to the International Monetary Fund (IMF), the quantitative easing policies undertaken by the central banks of the major developed countries since the beginning of the late-2000s financial crisis have contributed to the reduction in systemic risks following the bankruptcy of Lehman Brothers. The IMF states that the policies also contributed to the improvements in market confidence and the bottoming-out of the recession in the G7 economies in the second half of 2009
Economist Martin Feldstein argues that QE2 led to a rise in the stock market in the second half of 2010, which in turn contributed to increasing consumption and the strong performance of the US economy in late 2010. Former Federal Reserve Chairman Alan Greenspan calculated that as of July 2012, there was “very little impact on the economy.” Federal Reserve Governor Jeremy Stein has said that measures of quantitive easing such as large-scale asset purchases “have played a significant role in supporting economic activity.” Many , but not all agree that Greenspan got us into all this mess.
According to Neil Irwin, senior economic correspondent at The New York Times, quantitative easing by the US Federal Reserve likely contributed to: i) Lower interest rates for corporate bonds and mortgage rates, helping support housing prices; ii) Higher stock market valuation, in terms of a higher price-earnings ratio for the S&P 500 index; iii) Increased inflation rate and investor’s expectations for future inflation; iv) Higher rate of job creation; and v) Higher rate of GDP growth.
That brings us to the interest rate hike in December.
As long as Congress in the US is calling the shots, expect havoc in the economy.
That is correct, the “C” in “OECD” stands for “Cooperation”, not “Growth”; and it is more than just a “pan-national research group based in Paris”, as it supported at least in part by taxpayer fundings from member countries. In other words, another beurocracy we are expected to cooperate with.
Excuse me, but that is a Republican Majority Congress…. The same party that brought us 1929-1932 (90% loss)and 2007-2009 (60% loss)…
Living through the end phase of the global central banks hoovering of world wealth is going to hurt. No way around it. Sanity must return to global economics. We have gone against them long enough. Bring on the pain. The sooner we start, thesoonerwe can come out the other side. Central banks printing money and fractional reserve banking making it possible to loan out ten to fifty dollars for every dollar on deposit, means that every nine to forty nine loans are made with invented money. Good on us fools for believing that currency is still money
you fools
The very FIRST thing we need to do is make sure Sen. Bernie Sanders gets elected. Anyone else, and nothing meaningful will get done. If sHillary wins, say hello to Pres. Trump. Even if he isn’t the nominee, the only one she can beat is Bush, and he’s not going to be in the race much longer. Bernie beats all of them hands down so the real problem is getting him the nomination. Not that it’ll prevent the crash on the way, but Bernie’s plan is the best to mitigate the damages.
The “super delegate” system assures Hillary the nomination. Bernie has trounced her and still has fewer delegates. Jim
Its not who casts the votes
Its wh counts the votes
-Joseph Stalin-
you got my vote
I care not who makes the country’s laws I only care about who controls a country’s currency
-Nathan Rothschild.
Didn’t work so well for Stalin or the Russian people did it?….. :(
If Bernie keeps winning, that will get corrected…..
Rather go down in a blaze of glory with Drumpf
I also find it ironic that the candidate with the most experience, administrative skills, the ability to work with both parties, and the biggest heart is running dead last in the polls. Jim
who the hell is that? rubio?
No tell! Jim
Bernie NO!
His initials say it all.
Regarding government spending to save the economy, you say: “But in this era of overly aggressive, anything-goes monetary policymaking, that just isn’t going to happen.” as if that is a solution!!!!! Are you crazy!!
Work in 1932….
Barry Soetoro can’t find anyone who can create the shovel ready jobs
OECD,,, Are they the ones doing the advising that got us here to start with? ROFLMAO
Mule
Buicks used to be built in Flint, Michigan, where the water crisis is now. I own a Buick Electra built in Flint, but the Buick Encore a friend of mine bought was built in South Korea in an auto plant GM acquired from Daewoo. Obama bailed out GM to the tune of ten billion dollars with no strings attached so GM thanked us by building four new auto plants in China, costing eleven billion dollars.We ar also shipping coal to China, apparently so they can manufacture the cars they intend to send over here. Part of the Trans Pacific Partnership treaty eliminates country of origin labels, so when we buy a pissy-assed Asian tin can with an American nameplate on it, we won’t know. With all the good jobs overseas, we will need the fifteen dollar an hour minimum wage so we can afford to buy the foreign junk
so get a ford
Fred
Be careful what you wish for. This whole excersize of shipping jobs overseas is to put the fear of big business into you. The jobs will someday return to US shores with Asia wages attached. All the TPP does is protect big Pharma and their overpriced products. All the Asia countries are abandoning their citizens to the sky high costs of drugs that these vultures think their product is worth. Obama thinks that these Asian countries will bring their human rights and pollution laws up to US levels forget it.
Robots – no more job actions no more complaining
Build a wall around it
around a ford
This report for all practical purposes and proposal doesn’t make any real sense, inasmuch as the worlds central banks (and the US federal reserve) are already bankrupt! And nobody , we hope, is willing to go further into bankruptcy on a vail attempt to ” stimulate” a economy that simply is non existent – just ask Greece.
The US is currently and will remain in a recession for quite some time; Europe is done and their banks are headed into crisis mode shortly; Japan died decades ago and China, bless their hearts, will continue to lie to us – as they continue their death spirit to the finish line.
It’s over! If we had let the economies run their nature courses, the damage would have been mitigated, however the “desperate ” attempts to revive the global economies only constituted pouring more gasoline on the fire. Now you cannot value your currency or assets! QE’s , negative interest rates and the like are consistent with self confirmed and funded chapter 11plan – that is simply Not Feasible!
Only real option left is to wipe everybody’s slates clean – but that won’t change the weather either.
Oh yeah, forget about the term recession and adopt the term depression – because that’s where we are all going into..
I recently bought a tool labeled “ASIC Swiss Made”; but the packet it was in showed “ASIC SA of Switzerland” with the addition of “Origin CH”. Why is it that the lawyers involved in drafting Trade Agreements pay little or no attention to requirements for “Certificates of Origin”?
Switzerland’s Official Name Confoederatio Helvetica CH
I know people who won’t use Panda Anti-Virus because because it is for sure made by them commanist Chineese
Mike, your heading asks: “Can Government Spending Save Us?”, which is like asking Can Governments Save Us From Themselves? The answer to that remains an unqualified: No, Governments can not save us, as they do not understand that they are the cause of the death of the economy. David Stockman compares this present economic situation to be like that of a child who kills his parents, then claims to be not guilty because he is an orphan.
Make that read: David Stickman compares the role of governments to the present economy to be like that of a child who kills his parents, then claims to be not guilty because he is an orphan.
Stockman gave us this current mess from Reagan forward until the Crash of 2007-2009…… Same Conservative financial stupidity brought us 1929-1932….
what about the liberal stupidity Eagle495 like you you never mention of the fact that the second depression was in the second term of FDR a liberal progressive democrat that was in 1937 the only thing that ended that depression brought on by the democrats was WW2 second of all quit cherry picking your information tell the truth EAGLE495 tell everyone the democrats had complete control of the senate from 2004-1014 and they also had complete control of the congress from 2004-2010 and that the idiotic policys of the democrats killed the economy why don’t you mention that Obama has literally doubled the national debt in 7 yrs were now headed to 20 trillion and that obamas new budget was for 4.1 trillion dollars it seems like he is doing everything in his power to kill this country
he’s a dimocrat and BS is their only weapon
You seriously need to go get a book on history and read it…… The Depression began with the Hoover Republican Crash of 1929…… 1937, like now, was a pullback when FDR slowed Federal Assistance, just Obama is doing now…… The greatest period of economic success in America happened between 1932 and 1980. Go ask your Grandparent and Parents and quit taking everything Rush says as gospel….. Geez, you are an educational moron. Did you not even graduate from High School? Sleep through US History?
Hmm…hawk5000. What is WWII but massive….massive….massive spending by our government?
Eagle, it’s a stupidity that was bought by the American people via Fox-no-news propaganda and the like. They ran a tight very organized plan this time designed to take our government down. They surely knew it would also take down the majority of the American people with it…their ability to provide for their families etc. This makes them worse than stupid. I’d call it evil.
Amen and Well Said!
Frank derivatives gives people (govs) the opertunity to borrow money but they dont want to pay it back sometimes they cannot pay it back How about a few good old fashioned government defaults to rid the world of this ridiculos debt frank
You Americans just get me you have a corrupt fed that should be blown up, they are your problem, so please don’t complain when you go tits up, its called reserve fractional banking, look it up.
All quite true, and entertaining, but also disgusting! I don’t like what I see! But let’s be
Prepared for the worst and hope for the best!
I bought my place for $70,000 1970 value dollars but the best I can get in 2016 dollars is $210,000 and in order to get back my 1970 value plus interest I need to get $ 700,000 in 2016 dollars just to get even.So where is the american dream of home ownership??Just to get even in candy bars,coffee,bread milk etc.I need to get 3 x what the market dictates.So we will have to bottom out, take our beating and rebuild. sincerely,william
Sent your kids to college and they will do better…..
Be sure to add plenty of safe spaces in that new dwelling for that dingbat twerp who went postal because her flight was canceled.
MIke: The economies of the world have taken on too much debt. Nero zero interest rates created a moral hazard. It encourages irresponsible investing which is going to blow up, especially in the junk bond market as you have pointed out. The right thing to do at this juncture for all countries is to reduce government spending and reduce taxes simultaneously! This would result in a massive transfer of wealth from the governments who took it, back to the people who have worked and sacrificed all their lives to earn it. It is very important to put as much money in the hands of business as possible so that they can pay off the excessive debt that they have and maybe some jobs can be saved. What I have suggested is the Austrian school of economics solution to accelerating the end of a deflationary period, which is what the world is in for. I hope you print this. Regards and thank you for all you do. Robert Calabro.
Good to work.
It’s time these government entities describe the situation like they’ve done. Their personal incomes depend upon some mysterious event i.e. essentially a miracle of some sort.
We collapsed our stock market in 2000 after too much leverage or margin or debt, whatever you like to call it. The we collapsed again in 2008 after too much debt causing the housing bubble. Now with the US debt to GDP greater than 100% and Fed liquidity efforts failing the OECD businesses to cough up investment when they already have sufficient capacity and debt is already so excessive we can’t get any growth throughout the world.
We should send the OECD to Mars and start to correct the debt situation by reducing government spending the money they don’t have and lowering taxes so that people have spending power.