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The bottom of the trough?

Discussion in 'Political Discussion' started by atomdomb, Mar 3, 2009.

  1. atomdomb

    atomdomb Third String But Playing on Special Teams

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    Are we finally at the bottom?

    GDP troughs. Check? We may have a bit further to go.
    Fed lowers rates? Check. They can't go any lower.
    Business growth weak. Check
    Leading indicators decline - unemployment, consumer confidence, housing starts, durable goods orders. Check. Check. Check. Check.

    Can it get worse. Probably but I just don't think the business cycle is going to stop working this time. We are hopefully going to start pulling outof this soon. Are there any other optomists out there?
     
  2. sdaniels7114

    sdaniels7114 Experienced Starter w/First Big Contract

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    As long as people still want to go to work this'll fix itself sooner or later. All the government can do is make it better or worse or make it shorter or longer.

    It sure was nice 10 years ago when we were talking about the end of the business cycle in the other direction though.
     
  3. PatriotsReign

    PatriotsReign Hall of Fame Poster

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    #18 Jersey

    Most economists believe this is going to be an L-shaped recession, not a U-shaped one. In other words, we'll probably languish on the bottom for quite a while.

    The financial industry hasn't bottomed out yet and neither has unemployment. As a matter of fact, unemployment typically bottoms out AFTER recovery begins. It is a lagging indicator, not a leading indicator.

    Since we have a choice whether to be optimistic or pessimistic, why would anyone choose the latter?
     
    Last edited: Mar 3, 2009
  4. BelichickFan

    BelichickFan B.O. = Fugazi PatsFans.com Supporter

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    #24 Jersey

    No end in sight for my NON expert opinion. If we'd let the economy take it's natural course (that's Obama AND Bush) then I think we'd have the end in sight. As it stands, who knows because we aren't letting it happen the way it's supposed to, we're trying to massage it. Deficit has skyrocketed the past month and it's not clear it will fix the problem.
     
  5. PatriotsReign

    PatriotsReign Hall of Fame Poster

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    #18 Jersey

    BF...your sentiments are exactly what I was saying almost a year ago. Do you remember? I was saying that recessions can be good for the economy if they are allowed to run their course as they reset the natural balances of a free-market system and restore confidence.
     
  6. BelichickFan

    BelichickFan B.O. = Fugazi PatsFans.com Supporter

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    #24 Jersey

    I know and generally I would have agreed. I feel for the scare mongering of "get ready for Dow 8,000 if we don't do this" so I reluctantly supported it. Now I realize it was all a con job.

    Fool me once . . .
     
  7. PatriotsReign

    PatriotsReign Hall of Fame Poster

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    #18 Jersey

    I've gotten so sick of economic news, I've pretty much stopped posting my own threads on the topic. That's a big change for me but it was getting too depressing for me.
     
  8. wistahpatsfan

    wistahpatsfan Pro Bowl Player

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    #75 Jersey

    Agree on the L-curve, but I think unemployment will bottom in third or fourth qrt of 2010 in Mass as the government has aready stated. The housing market will stay down at least that long. Other things may tick up ahead of unemployment, but not housing (in my ameteur opinion).
     
  9. atomdomb

    atomdomb Third String But Playing on Special Teams

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    I agree that many economist believe it will be L shaped but many also believe it will be U shaped.

    Since 1926 the market has experienced 16 declines of more than 20%.

    The average decline was -38%

    In 15 of the 16 cases, the market was positive 12 months later.

    The average increase in the year following the declines was 49%.

    This market is the 16 case that we don't know about yet. Will it bounce back like the others? Only time will tell.
     
  10. Patsfanin Philly

    Patsfanin Philly Experienced Starter w/First Big Contract

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    #95 Jersey

    Do you have any citations for that because it seems high (low?). After the great depression, this decline is the second largest at 50%+. To get a 38% average, you'd need a lot of 40% declines and there haven't been that maybe, many in the 30% range but not enough to get to 38%.....

    The Worst Years in the History of the Dow Jones Industrial Average
     
  11. atomdomb

    atomdomb Third String But Playing on Special Teams

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    The declines of 20% or more were peak to trough declines. Many of these do not show up on yearly return charts because the trough doesn't occur at the end of the year. The info was taken from a Lord Abbett seminar.
     
  12. PatriotsReign

    PatriotsReign Hall of Fame Poster

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    #18 Jersey

    When you say "the market", what are you referring to? The Dow? Keep in mind that the stock market is not the economy.

    So when you say "The average increase in the year following the declines was 49%.", what increased 49%?
     
  13. atomdomb

    atomdomb Third String But Playing on Special Teams

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    S&P 500. hhhhh
     
  14. ljuneau

    ljuneau Rotational Player and Threatening Starter's Job

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    I think it all depends on what congress and the president do. If cap & trade, universal health care, trade restrictions, or the tax increases are passed, the economy will get worse. Any of these will only add fuel to the fire.
     
  15. atomdomb

    atomdomb Third String But Playing on Special Teams

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    I agree and disagree. Cap & Trade will be devastating. It is moronic and will have long lasting negative repurcussions. Universal health care? Another stupid idea. We are 2 for 2. Trade restrictions? Again I agree with you. Tax increases? This could be discussed. By taking more money from the people that create jobs and giving it to the people that don't want to work he is forcing more money into the system. This may actually give the economy a little boost when the lazy people blow their free money on stuff. Even if they buy drugs with the free unearned money that will filter back into the system. This bounce will probably be short but may galvanize the voting base of bums to get him elected once more.
     
  16. Patsfanin Philly

    Patsfanin Philly Experienced Starter w/First Big Contract

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    #95 Jersey

    I meant the 38% average. I think it's incorrect based on common sense. For it to be the average, there have to be a large number on either side of it and there haven't been that many greater than 38%. Until I see hard data, count me as skeptical...
     
  17. atomdomb

    atomdomb Third String But Playing on Special Teams

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    Here is your bear info...

    THE BEAR FACTS

    Remember since 1926 declines of more than 20%. The average at the bottom includes a couple of declines less than 20%
     
  18. PatriotsReign

    PatriotsReign Hall of Fame Poster

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    #18 Jersey

    If you think all poor/low income people are bums, drug addicts and stupid, that says a lot about where you come from.

    Our health care system doesn't work and it's not sustainable at the rate of increased costs over the past 10-15 years. Something has to be done. Thank God we're not just leaving everything status-quo.
     
    Last edited: Mar 3, 2009
  19. atomdomb

    atomdomb Third String But Playing on Special Teams

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    My exaggerated post is to show that we are jacking up tax rates on the ones who help society produce by making more jobs and giving a very large portion of those breaks to people who do nothing to help society. Do you know that the 80% of the sweeping welfare reforms that President Clinton enacted will be rolled back with this stimulus. How does that help? More people on welfare means more people sucking the endless teat of the government. It really means more votes and that is why it is in the bill.
     
  20. BelichickFan

    BelichickFan B.O. = Fugazi PatsFans.com Supporter

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    #24 Jersey

    Our health care system is fine. We need to control medicare costs and find a way for uninsured to be able to buy (that's BUY not GET) insurance. And that's about it. The system needs tweaks, it doesn't need to be thrown away.
     

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