Economy Slowing Again

[Puck it]

Just an FYI. My company just announced a shutdown for July 4th. Not good news for the economy. We have been seeing orders being pushed out for machines, even in Asia. Not a good sign. My company is ususally the first to see slowdowns.

[deadheadskier]

I've read rumors over the past week that JP Morgan Chase is preparing for another Lehman like disaster in the coming months.

[o3jeff]

Whats your field of work?

[riverc0il]

What is even worse for the economy than a slow down of orders is the internet buzzing with talk of a slow down. These economic self fulfilling prophecies are amazing to comprehend. I've been listening to the Euro news and then I see this and then I see DHS suggest JPMC could be in trouble. All that makes me start thinking about putting more away in savings "just in case" (not saying I am going to until I really start things getting bad). Multiply that times the entire population of the country with disposable income and it is amazing to contemplate what just a few news stories and internet buzz can do.

Unfortunately, we all have to pay for the many (and the corporations that enabled them) that lived beyond their means during the past dozen years. And now we'll all have to pay for some Euro governments that took on too much debt assuming the good times would never end.

[Warp Daddy]

OK here's my take : The economy and personal debt is in free fall and has has been for some time .

The economic razzle dazzle games that have been played by both the private and public sectors coupled with the outrageous nonsense proffered by Bennie and the FEDS has artificiallly buttressed the data for the past several years. The stock market simply is too volatile and subject to manipulation and mass psychology now . During the the period 1982 - about mid 'oo's it was a reasonable strategy for many now it is a sucker's bet . especially for anyone within a decade of retirement or those in retirement . its fine to buy in but make sure you are balanced and have ample reserve of safe resources .

This scenario is not a solid foundation upon which to project anything of rational econometric modeling INHO


the D word will never enter into the lexicon yet the situation is dire

[Puck it]

Whats your field of work?

Physicist for a semiconductor equipment, so when chipmakers see a slowdown in orders. We are at the front of the line. Very cyclic business but in the last few years we have been more cyclic.

[riverc0il]

the D word will never enter into the lexicon yet the situation is dire

Dire? DIre is Spain and Greece.

The stock market is not the economy. People put too much, um, stock in the stock market. It is important but it isn't the end all be all. It puzzles me why whether the market is either up or down is even reported in the news. If you are an investor trading daily or invested in specific stocks, you already know what is going on because you are following it. If you are invested in a 401k or mutual funds, then you are in it for the long term (or you SHOULD be) so what the stock market does is irrelevant on a yearly basis, let alone a daily basis. If you are retiring soon, well, you really shouldn't be in stocks and if you're retiring in a few years, you shouldn't have much left in stocks except enough to hopefully offset inflation.

What is going to drive the economy diving again is people stop spending, businesses stop selling, businesses stop spending, and jobs get eliminated... further perpetuating the cycle. If the banks tighten up on lending because of problems in Europe, that further decreases spending and hurts more. None of this is caused by the stock market though of course the stock market will be effected and could effect those with poor investment choices. Market doom and gloom is a joke. What is happening in Europe though is pretty crazy.

[JimG.]

Buy gold.

[Nick]

Maybe this sounds unpatriotic which isn't the case at all, I love the USA and think we live in the greatest nation on the earth, but broader than that there has yet to be in the history of humankind a civilization that has endured for perpetuity. They all come and go, eventually. I think technology could potentially play a huge role in the next evolution of human governance, many of the structures we see in the world (states, nations) are based on location and the historical difficulty it has been to communicate quickly. With that changing so rapidly, I think the notion of borders becomes more endangered.

I don't know if that's a good or a bad thing. I just think it's a thing. You can't underestimate the ability for someone in any corner of the globe to communicate instantly with someone on some other corner of the globe.

[deadheadskier]

I think our government very much agrees with you Nick, hence why we have bases on every corner of the globe.


Now, regarding the economy, I think a painful, but good first step would be to re-establish the gold standard. IMO it would offer better long term economic stability with fewer booms and busts.