I think you missed my point. You are saying that the Chinese government doesn't care and has leverage over the US due to their ownership of debt. So let's say that China decides to call in markers on all that debt and the US economy collapses. What good does that do for China? They will lose a HUGE customer in the US which will then landslide down to every other economy in the world and China is back to where it was many years ago.

Is your boredom at a historical high? Has it reached its theoretical maximum?

Finally. The whole situation was exacerbated by the SEC doing away with the up-tick rule. It was in place for decades but they got rid of it a year or so ago. That would have held the shorts at bay somewhat.

don't bother trying to argue with him. it's clear from his posts that he doesn't have a grasp of what he's talking about, and resorted to ridiculous statements after getting called out.

Here is the post above. jwbeuk's post was the one I was responding to but didn't specifically point him out, but since you asked.

jwbeuk is oblivious to the situation but that maybe because he has no long term investments and has no portfolio to look at to see the impact. Again, if you have nothing to begin with (no investments) and rely on only your incoming salary as an indicator, then you nothing to lose...you will keep collecting a paycheck and fail to see beyond your own personal situation.

Maybe he doesn't foresee a most likely increase in his taxes due to the gov't bailout. If he has a house that he wants to sell, tough luck because it will be very difficult to do so. It is naive to think you are immune and not affected in some way from what's been going on.

Right now the gov't is stepping in to bail the economy out and we are lucky.

Thank you for the nice thoughts. As to the second point, I consider that a good thing.

And yes I understand that people not spending wildy about wealth they never really had would slow our economy down greatly. Again, a good thing.

Now if our government could learn those lessons and stop spending freely and worry about our financial security, I wouldn't stay awake nights thinking about my children's future.

Bob V

China has some leverage. They would rather not play that card, but threaten to use it if it will affect policy decisions (i.e the US having too much support for Taiwan is a good example). China would not use it to crash the US economy because you are correct, it would affect them as well, but at some time in the not so distant future China's economy will eclipse the US, and when that happens, they will be more inclined to play with US financials, because they will be self sustaining (not totally, as no country is totally, but you get my drift) and want to rise in power and prestige in the world's eyes. A good example is the lengths China went through for the Olympics. It was an international dog and pony show and went over pretty well, with a few minor bumps. Chinese culture hold respect very high, and once they become the world's largest economy, they will be emboldened.

Watch the Chinese govt actions, and see how their economic actions are parallel to their political posture. Very telling.

Well Bob, I'm glad to hear you are unaffected directly the current financial crisis.

Please point to me where I ever said that?

You are correct, most will be fine, and weather the current situation, but with people's investments taking a hit, most feel less wealthy and are less apt to spend freely, and more focused on their financial security.

Thank you.

Trillions of dollars is not just high drama. That is capital that is wiped out. The economy is resilient, but this has shaken the confidence of overseas investors. We rely on them to buy our debt. If they don't, then this country is in more trouble than most understand. Plus, as countries (like China) buy US debt and hold a large portion of it, they can use this as leverage to affect foreign policy.

I've never thought a global economy was such a great thing. I hate to admit this, but I side with Pat Buchanan on my view of many trade matters. But everything in the economy ... domestically or (generally) worldwide ... has checks and balances. China's economy and our economy are co-dependent. Yep ... they could really hurt us. But what possible motive would they have for doing so?

Since China is now the 800 lb gorilla of manufacturing, a chinese govt backed co. can spring up tomorrow in direct competition to you, and put you out of business next year.

There are already tens of thousands of Chinese companies that are in direct competition with my company. There are certain economies relating to the size of orders and the cost of transportation of goods from China that have always made it hard on smaller, local companies to do business with them. There are also plenty of companies that require short runs and the ability to make mid-run changes that are extremely difficult to manage with the Chinese. These are areas where we've carved niches. We also change and adapt as the marketplace changes. It's easier for us to do than it's been for many of our competitors and predecessors because we aren't beholden to bankers and outside investors. We've expanded in controlled steps. We've used our own capital. We can do things that many, many other companies our size cannot do for those reasons. And on this note, back in June, our suppliers were saying "the sky is falling" because the Chinese were sucking up all the raw materials on the planet and our supply prices were supposed to go up by 40% by August. Now it's September. The prices never moved and we're hearing that there are price reductions in the pipeline. Checks and balances. The pendulum swings. Things are cyclical. The sky is not falling. (NOTE: I am thankful for the actions of our government in the last 48 hours to put some pillars under the sky.)

I am a founder in a start-up company that is 3 years old with 55 employees in 8 countries. I deal with about a dozen different manufacturing companies on a daily basis, mostly overseas. So, I am much more aware of the international implications of what is transpiring.

Ah ... I see. You're much more aware than I am ... after 3 years. A dozen different manufacturing companies. Wow. I'm sure you are much more aware than I am, though I deal with about 300 different companies - domestic and international.

So, I am not just talking out of my ass here.

Oooookay.

.

---

Bob C.

The "science" on any matter can never be settled until every possible variable is taken into account.

Trying to explain to that your own chart shows that 6.1 is, historically, a pretty low number does push it pretty far.

Oh, I didn't really think of it as arguing.

I'm one of the few (very few, it often seems) triathletes that doesn't have an unlimited amount of money I can spend on everything. I'm definitely not able to race as much as I would like next summer, if things keep up like they are now. And unfortunately in this area, there are a lot of people in this position. A couple of the local races here, that really cater to new triathletes and trying to get new people into the sport, are having tough times because "new triathletes" aren't accustomed to forking out tons of dough on entry fees and gas for travel, lodging, etc. So the biggest issue I see (other than the fact that I can't race as much as I'd like), is that the economy is definitely bad for getting NEW people into the sport. It may not affect 95% of the current triathlon population, but it definitely affects the growth of the sport, as far as getting newbies involved. Especially when I've heard bike prices for next year are going WAY up.

plenty of long term investments and I'm in the process of selling a house right now in Colorado. We are getting full value, the house was only on the market for 30 days and and since we have taken no equity out we are walking away with a nice profit after 9 years of annual increases in value. Oh by the way, I'm selling as my move to a new job and no I am not now nor have ever been unemployed. So am I affected, no. Most people I know aren't affected. The sky is not falling, and the fact that I actually read comments from the likes of you who seem think this is the great depression makes me laugh. Sorry. I have no financial worries right now. Too bad.

"I've heard bike prices for next year are going WAY up. "

If that's really true, I'd suspect sales are going WAY down.

I never said we were experiencing an economic Depression. The economy will recover, in time. You are "in the process" of selling your house but you haven't closed on it, so it is NOT a done deal. (There is a big difference between what a house is appraised at and what the house actually sells for.) Lucky for you that you narrowly averted the events this past week because if you put the house up for sale today, mortgage lenders will be scrutinizing credit and will probably require the 20% down.

But don't try to use the sale of your house selling as the only example to prove you aren't and won't be affected. Look at your stock portfolio. Did it go down, stay the same, or go up? Answer: DOWN which means you are affected. It will likely go back up overtime, but who knows how long you'll have to wait.

Are you that naive to think that you won't possibly see a tax increase? Who do you think is going to have to help fund the gov't bailouts?
Answer: The taxpayers which includes you, and therefore will affect you. I feel sorry for your new employer.

I'm done posting on this thread. The people like you who are oblivious to the current financial situation..IT IS LIKE TRYING TO CONVINCE PEOPLE WHOSE IRONMAN PR IS 14 HOURS AND THEY STILL THINK THEY HAVE A LEGITIMATE SHOT AT QUALIFYING FOR KONA (non-lottery).

will still participate with similar frequency but may not have the latest new technology, nutrition, etc.......putting off training with power for a few more seasons, just can't justify spending the same amount that I would spend on a bike at this time......

Wow you are either incredibly young and naive or rather myopic in your view (your own backyard).

I have job security (primary care physician) and I own my house outright.

but I am VERY much affected. I started buying stock when I was 11 years old. In fact my first 2 shares were AIG at $50 per share. The nice nest egg/college fund I had in place that was worth $200,000 in March is worth about $7000 now. Of course some of that value will return, but I strongly doubt it will be up to the level it was at. I am lucky in that I will manage. I am young enough to potentially build new equity but I will have to be creative.

Look how many people have lost their pensions, mutual funds, life savings.

Your post strikes me as both arrogant and horrifically ignorant. Hope your job offer does not get reneged.

---

---

cat
Sponsored by Suntheanine, Lycored and Celadrin
http://www.lycored.com/web/content/library.asp http://suntheanine.com/Research.cfm http://celadrin.com/pages/studies.php

sorry bud, but NOBODY with a remotely diversified portfolio is down 96.5%...NOBODY. It appears your portfolio was inflated about 30 times, ironically that is the same ratio as many of the I-banks were leveraged. How the F did you manage a 96.5% drawdown in your portfolio?

My finances have not changed, but it is a good time to reassess or recailibarate my spending. Somehow over the years, it just became normal to spend $1,000's going to an IronMan and a few out-of-town events...get on a plane and go to a marathon. I think I just took that for granted as "what you did." I can afford it, but not sure I couldn't get the same or more joy out of local events and better spending habits. It's more enjoyable and much less expensive to make a picnic with your kids, go to the public park, then maybe stop by the library and pick up a few books. It just takes a lot more energy than saying, "Here's $20..have fun at the mall."

---

Damn, that's a cold ass honkey.

Shorter Learn: "Bernanke and Paulson? Whiners."

Yes, sadly I will not buy any race wheels...at least for a bit...

Interesting thread -- not a common topic for the main forum.

I'm an investment manager -- Chief Inv. Offcr of a firm managing money for real people. I make (or break) my living by being right (or wrong) about such things. Nothing sharpens one's focus like having to back up one's opinions with real, actual dollars. Especially with dollars that belong to other people. Posts on chat rooms are interesting and fun ... clicking "submit" on a page of trade orders is rather sobering.

Good economy/bad economy/...doesn't really matter to me. All that matters to me are the investment returns (current and expected) on investment assets.

Suffice to say that I have been far more right in the past 18 months than I have been wrong. "Right" in my trade is measured in basis points above index benchmarks. It's kinda like arguing about training decisions -- ultimately, the proof is in the results. I have been "right" in the four-digits of outperformance.

I expect that there are several more shoes to drop in the global deleveraging cycle that started in emerging markets in 1997-98 and is rolling through one sector after another (tech, super-caps, housing, financials,...). The endpoint? The US consumer. You and me. That is what's been lost on the focus on oil and financials for the past six months.

Stay tuned...more bad results to come. Not a depression or anything...just a long and frustrating grind.

You have missed some her other posts, but I'm pretty sure all $200K was in AIG. Not exactly diversified.

NBER's statement on the recession that began three quarters before Learn's post.

But in Learn's defense, recessions are rarely declared without two consecutive quarters of contraction which hadn't yet happened at that time.

I was wondering when you'd resurrect this thread so you could say, "I told you so." Couldn't resist, could you. (I wouldn't have been able to, either.)

"I've heard bike prices for next year are going WAY up. "

If that's really true, I'd suspect sales are going WAY down.

Either way, bikes priced in the $2,000+ range are a screaming deals in my book. You are basically getting the same bike that won the Tour de France and Ironman triathlons in the last 2 - 3 years. How state-of-the-art do you need?

---

---

Steve Fleck @stevefleck | Blog