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RECESSION 2020 ?

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Message 1 of 39

Here are the main warning signs for a possible recessiion on the horizon

  • Heavy Government Debt combined with Rising Interest Rates
  • Worsening Trade War
  • Rising Home Prices combined with Falling Sales
  • Heavy Debt among consumers

At this point in time, all of the above are true,

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Re: RESESSION 2020 ?

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Message 2 of 39

@rker321 wrote:

Nothappening  dream and stay in your alternative world and reality  The Dow is dropping also because of the Trump words and the Tariffs that he thinks is the way to act with China.  but you believe whatever you want. and I will continue to pray that someone shuts his mouth at least for the Holiday season.


So, you don't believe the USAToday headlines?

 

https://www.usatoday.com/story/money/2018/12/10/dow-stocks/2265396002/

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Re: RESESSION 2020 ?

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Message 3 of 39

Nothappening  dream and stay in your alternative world and reality  The Dow is dropping also because of the Trump words and the Tariffs that he thinks is the way to act with China.  but you believe whatever you want. and I will continue to pray that someone shuts his mouth at least for the Holiday season.

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Re: RESESSION 2020 ?

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Message 4 of 39

@rker321 wrote:

Another amazing day for the Market.  we are now pretty close as to how we were in 2008 so why no one is simply taping Trump's mouth before we all have to file bankruptcy.


Why is the stock market dropping? Dow sheds 90 points on trade, Brexit concerns

 

Trump isn't to blame unless the left wants to get a few LOLs in.

 

https://www.usatoday.com/story/money/2018/12/10/dow-stocks/2265396002/

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Re: RESESSION 2020 ?

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Message 5 of 39

Another amazing day for the Market.  we are now pretty close as to how we were in 2008 so why no one is simply taping Trump's mouth before we all have to file bankruptcy.

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Re: RESESSION 2020 ?

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Message 6 of 39

@gordyfl wrote:

I remember after the housing crisis reading about two people who made a fortune by betting against the housing market. One was from Japan. Another was a banker from Canada. There were others, of course.

 

 

 


Yes there were and one is in Trumps Cabinet

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Message 7 of 39

I remember after the housing crisis reading about two people who made a fortune by betting against the housing market. One was from Japan. Another was a banker from Canada. There were others, of course.

 

 

 

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Message 8 of 39

On the other hand, I remember McCain-Feingold which was going to "take the money out of politics". Before the bill was signed, the "work arounds" had been set up. And no one was ever held responsible - McCain and Feingold were praised for that failed effort. 

 

So - what are the odds........

 

Yes, when McCain-Feingold passed I was glad.

As elections passed by, we saw more money flowing into politics - not less. When Feingold was asked about how ineffective his Bill turned to be, he smiled, shrugged his shoulders and said something like "We tried". 

Later, I saw McCain give a similar response. 

Then came Citizens United....

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Message 9 of 39

@gordyfl wrote:

 


Here's the example as I recall:


Suppose I own a fire insurance company (Gordyfl Fire Insurance) and Customer A asks me for fire insurance on his home. Fine, just just make payments of 2% of the value of your home valued at $150,000.
Then Customer B asks if he can take out fire insurance, not on his home, rather take out insurance on Customer A's home. This was illegal until the late 1990s.
Customer C comes along and I talk him (or her) into taking out insurance on Customer A's home. I tell them the payments are small, but the rewards are great if Customer A's house burns down. But I know the chance of A's home burning down is close to zero, and I'm collecting 2 % - multiple times.
Then, since it's now legal, I sell fire insurance on Customer A's house to Customers D, E, F, G, H, I, J, K, etc. - all taking out insurance on A's house.
Then the unthinkable happens. Customer A's house actually burned down - and, because my fire insurance company was unregulated, I don't have the money to pay off ALL those customers. Hence, the Bailout (and then Dodd-Frank).
+++++++++++
"Isn't buying protection on a bond you don't own like buying fire insurance on a house that's not yours?"
"It is exactly like buying insurance for a house you don't own," Berman says. "So it's like you took out fire insurance on your home, and I also took out fire insurance on your home, and a thousand other people took out fire insurance on your home.
"And when that happens, what you're doing is, you're betting on the house."

 

Whew!!!  If you can understand that, you're a better man then I, Charlie Brown. 

 

I am not opposed to such gambling - as long as the gambler is using his own money. As to those such as insurance companies - I think they can do whatever they want as long as they have financial reserves to cover their obligations. 

 

It doesn't seem all that hard to draft legislation along those lines. - particularly for people smart enough to figure out the scams.

 

On the other hand, I remember McCain-Feingold which was going to "take the money out of politics". Before the bill was signed, the "work arounds" had been set up. And no one was ever held responsible - McCain and Feingold were praised for that failed effort. 

 

So - what are the odds........

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Message 10 of 39

To me the problem was and maybe still is the idea of "too big to fail". If that's the case, an entity should not be permitted to get to that state. 

 

I remember watching The McLaughlin Group back in 2007, before the finacial crisis made news. Midway through the show John McLaughlin asked Mort Zuckerman about the economy, as he usually did. Mort seemed like he was in a panic - "Credit Default Swaps!", "Credit Default Swaps!" and "Trillions of Dollars!"
I never heard of credit default swaps at the time, but, by Mort Zuckerman's reaction, it sounded serious. I got up and began Googling "credit default swaps". The way they descibed them sounded too complicated for me to understand, so I Googled "credit default swaps - simplified" and "credit default swaps - layman terms". I began to get an understanding of what they were. It wasn't until I Googled "credit default swaps - examples" that I felt like I had a pretty good understanding of what Warren Buffet described as financial "weapons of mass destruction".


Here's the example as I recall:


Suppose I own a fire insurance company (Gordyfl Fire Insurance) and Customer A asks me for fire insurance on his home. Fine, just just make payments of 2% of the value of your home valued at $150,000.
Then Customer B asks if he can take out fire insurance, not on his home, rather take out insurance on Customer A's home. This was illegal until the late 1990s.
Customer C comes along and I talk him (or her) into taking out insurance on Customer A's home. I tell them the payments are small, but the rewards are great if Customer A's house burns down. But I know the chance of A's home burning down is close to zero, and I'm collecting 2 % - multiple times.
Then, since it's now legal, I sell fire insurance on Customer A's house to Customers D, E, F, G, H, I, J, K, etc. - all taking out insurance on A's house.
Then the unthinkable happens. Customer A's house actually burned down - and, because my fire insurance company was unregulated, I don't have the money to pay off ALL those customers. Hence, the Bailout (and then Dodd-Frank).
+++++++++++
"Isn't buying protection on a bond you don't own like buying fire insurance on a house that's not yours?"
"It is exactly like buying insurance for a house you don't own," Berman says. "So it's like you took out fire insurance on your home, and I also took out fire insurance on your home, and a thousand other people took out fire insurance on your home.
"And when that happens, what you're doing is, you're betting on the house."


https://www.npr.org/templates/story/story.php?storyId=96333239

 

Youtube Cartoon - Credit Default Swaps...

 

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