Friday, August 10, 2007

Limbo, Limbo, Limbo. Most of the things I want to talk about, I can't talk about right now. That will all change -- for good or ill -- in the next week to ten days.

Meanwhile, it's always so interesting to me to see the range of responses to the economy. You've got the Bubble blogs, with the 'sky is falling' 'we're all dooomed..." comments, one after another, until you're ready to dive into a hole.

Then I turn on CNBC, and the commentators are definately riled and excited. The Fed pumps 38 billion into the system, over three injections, in one day, something that hasn't happened since 9/11. You got Cramer of Mad Money screaming: "THEY KNOW NOTHING!" and having what appears to be a breakdown which he is turning into gold. At least it appeared completely sincere.

It reminds me a bit of the October crash in 1987(?). I wasn't all that worked up about it until I watched the financial news that night. The commentators appeared scared, totally frightened, (George Jr. after 9/11 sized scared) in their eyes, and that alarmed me more than anything they said, which was typical blather.

And finally, I go to the major new sites, such as the U.S.A. Today, or this morning's Bulletin, and not only is it not on the front page, its not even headline news through the rest of paper. Still obsessed over the trapped miners, and bridge collapses.

So either their perspective is the right one, and the economy story is smaller than it looks, or the major news organizations are doing stories about local disasters while the national economy tanks.

3 comments:

Anonymous said...

Duncan,

First of all I don't know where these doom & gloom's are, I think most of the bloggers feel this is a healthy long due correction for Bend.

Post 911, the government over-primed the pipe, Greenspan dropped the interest rate to 1%, and allowed the FED to completely let Wall Street take over home mortgage's. Now everything has collapsed, its going to take months and or years to put back together again, in the old form where home loans originated from banks.

I don't watch TV period. So, and the reason is I feel its complete bullshit 24-7-365.

What to watch for is folks jumping out of windows, and I have NOT heard of this yet, we saw a little post dot-com. A lot of folks have been making $1Mil/yr or more during the past few years consulting, trading, brokering, and right now everything is dried up. For the little guy such as yourself, "What's the big deal?" These things take months to trickle down.

It's NOT useful for US-TODAY to tell people to withdrawal their money from the bank, and put it under the mattress.

Look at the Great Depression, it lasted 13 years, and while folks jumped from windows in 1929, it didn't hit 'main-street' until 1933. Then it was 7-9 lean years getting people back to work.

The current analysts are saying the 5/1 Arm's from second 1/2 of 2006 will not even reset until 2011. The prediction for Bend is that 25% of these will then default. That's four years from now, The analogy of turning around a battle-ship is appropriate.

Lastly, lets talk about people. When your neighbor loses his job its a "recession", when you lose your job its a "depression". A WHOLE LOT of people in Bend are going to lose their jobs in the next four years, and most in the next two. Let's just hope its orderly, and we don't have to read everyday about folks jumping out of windows, of course in Bend, it will be people blowing their brains out.

Bend Economy Man said...

CNBC is a financial channel. For the people who watch it, the stuff that affects Wall Street is exactly what they understand and want to hear.

The Bulletin and USA Today are not financial publications. Both are lower-middle market.

At The Bulletin, you don't have many editors, writers or readers who are interested in understanding what's going on in financial markets. People read The Bulletin for local news, and those who are interested in financial news watch CNBC and read The Wall Street Journal in addition to The Bulletin.

Anonymous said...

read The Wall Street Journal - bem

Bem, I read the WSJ everyday, but they're still NOT going bash wall-street because they live there.

There is a great book that came out 20+ years ago called "How to read the WSJ", normally the good stuff is in the back, e.g. back in the finacial section, most of the front is just pro-dubya opinions.

What's great about the WSJ is they at least tell you who is making money and who is losing. The ramifications of such, you have to figure for yourself.

WRT duncans comments, its not in the mainstream status-quo elite to tell the masses that the sky is falling. All these people back east go to the same partys every night, and if you bad mouth someone, you'll not get invited. Same with DC very cozy, negative press doesn't get you invited.

I also read the financial-times of UK, its their version of WSJ, and they hate DUBYA, and thus print the negative of the USA economy. Thus if you want the truth, read the Financial-Times, they have a great subscription home delivery rate if you tell them your a student up at COCC in the PHD economy dept.