Economic Market Turmoil

Stock markets fall once again, with several fearing that a second recession is impending.

Perhaps interestingly, gold has hit a new record price, of $1867.30 per ounce. Talks of a "gold bubble" forming are going around in some circles.

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edited 19th Aug '11 6:54:05 AM by AllanAssiduity

"In other news, stock prices fell today on bad economic advice that stock prices fell today..."

I like to think that in two hundred years or so, we'll have come up with a substantially more stable, less fickle, and less arbitrary method of running the global economy than the stock market.

I'm willing to bet part of it will be isolating news about it.

We'll have AI run everything for us and it'll be too complicated to talk about without complex mathematical equations leaving barely 0.01% of the population capable of understanding it.

And then Skynet goes online and we play "Global Thermonuclear War." Nukes Fall, Everybody Dies. The end.

edited 19th Aug '11 11:04:37 AM by USAF713

Have the stock markets not been in Turmoil since the downgrade of the US credit rating?

edited 19th Aug '11 11:21:37 AM by whaleofyournightmare

They were on the upturn, until the bullshit over the default and the downgrade...

I think I could fix the economy by hijacking every tv broadcast and just have message go "THE MARKET WILL RECOVER" for 2 hours.

Btw, that idea isn't half bad

If it worked it would be absolutely hilarious...

I know the market declines when people go "THE MARKET WILL DECLINE" so why can't the opposite be true?

How bout some freaking optimism people!

Right...

If you're and optimist and you're wrong, your life becomes shit. If you're a pessimist and you're wrong, you're pleasantly surprised. If you're a pessimist and you're right, you can say "I told you so!"

Pessimism is the better deal.

^ Basically, this.

Gold is an example of the "this'll work out!" thing that you're advocating. Watch what'll happen if people start having second thoughts.

Not a whole lot of use for gold if the economic downturn results in reduced demand for goods containing gold. Like ridiculously-expensive sound equipment.

EDIT: Gold also has the problem of being really easy to recycle, even easier than recycling aluminum.

edited 19th Aug '11 1:47:31 PM by ssfsx17

Double dip!!!!

The markets are sucking because people aren't comfortable with the world's financial state because of the crisis in europe and the JOBS crisis in the US.

If we want to get the market in order, put people back to fucking work. Good luck getting a jobs bill passed through congress though.

^ Because the last time worked so well...

I keep telling you and you don't listen. Uncertainty is the driving force and this flailing around spending money left and right by the government is merely creating more uncertainty.

People don't want to spend because they don't know where the economy is headed, business don't want to spend because they don't know what new taxes or regulations are headed their way, government is overspending failing to realize either scenario and this is all adding up right now.

The Keynesian approach fails to account for uncertainty and perceptions.

The problem is that the American government has allowed itself to get into the position where its government needs money at the same time as the economy in general needs it. If they'd worked up a surplus (or kept the one Clinton gave them) then they'd actually have some money to spend right now.

Oh Tom, never change <3

"No one writes articles about the economy we could have had." The stimulus saved jobs. Not as many as the administration suggested it would, not as many as we wanted, but about as much as Krugman and other Keynesians expected-which is to say, not enough. So you can say "Oh, you were wrong, why should we listen to you?" but the reality of the situation is that no one listened to us in the first place.

edited 19th Aug '11 5:37:20 PM by TheyCallMeTomu

^ No one listens to you because you have no historical evidence to stand on. You think it's just a game of numbers when the reality is far more complex and abstract.

People's perceptions aren't numeric expressions. They decide whether an economy goes up or down, not some fancy equation on a whiteboard.

Better to have no numbers-because no one has ever even come close to trying anything like what the Keynesians recommend-than to have information that directly contradicts your theories. You know, the whole "cut taxes and the economy will flourish" mindset.

As for austerity measures leading to depressions, anyone who's actually studied the problems Japan has been going through should have been able to tell you that much. No numbers my ass.

The people who are oversimplfying the world are the Austrians and libertarians, who have a blind devotion to "free market" principles, not realizing that the economic models on which those concepts are born from don't properly account for first mover advantage or any of the other umpteen million ways in which firms get Market Power. There's a special kind of blindness that goes with that.

Yes, people's concerns about the economy prevent spending. In order to get people spending, we need to make people feel like there will be an economy in the future. Debt probably has some effect on that, but again, unemployment is a much bigger issue. If you have public sector workers, those are still citizens who are actually able to spend money-and that spent money goes into the private sector.

edited 19th Aug '11 5:45:00 PM by TheyCallMeTomu

What are "austerity measures" again?

Cutting spending. Killing infrastructure works. Etc.

"Tightening the belt common sense solutions for dealing with our nation's crippling deficit."

I'll grant that after reading the CBO report, I'm a little more in favor of deficit reduction than I was before-I just think that we should decide on plans now, but wait two years before actually setting them into play. And, of course, it has to come through a combination of cuts and revenues (preferably with an emphasis on revenues, but we'll see what the political reality is come 2012)

Also, I'll agree that "paying one group of people to dig holes and another group of people to fill them up" would be ridiculous. If we're going to be using government spending, it really needs to be on infrastructure and education-areas where we as a country are falling tremendously behind (and, by virtue of falling behind, are wildly less competitive).

Now, Obama has proposed payroll tax breaks as a form of stimulus. I am ... not really sure I'm in favor of this. I mean, yes, it's stimulus actually directed towards the middle and lower classes, which is great and all, but honestly? Tax breaks are not great stimulus. People are afraid for the future so they just hoard money, so that if their car breaks down, they can afford to fix it. Instead of reducing the revenues the government takes in, we should really be paying to fix our roads, build our internet, educate our children-spending money on things that actually can accomplish things.

edited 19th Aug '11 5:49:15 PM by TheyCallMeTomu

Hm. I am detecting no illogical reasoning behind your argument. Therefore, I tentatively agree. Let us see Tom's (presumed) rebuttal...