Latest Economic Threat: Optimism

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rangyjimen of DC 6:12AM July 21, 2009

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Qvcclxjw of MI 1:51PM July 15, 2009

"but as long as the government responds in a timely manner and raises interest rates according to inflation in a measure to keep it down, we shouldn't have to worry"
What a joke - rising interest rates blow a HUGE hole in the recovery plan and kills the majority of refinancing activity, both residential and commercial.
"This stuff has happened before, the government is doing what it can to keep things going in the direction that will benefit citizens, and things will come back"
Wrong Josh this "stuff" hasn't happened before - I really can't remember the last time 60+ trillion dollars of derivatives exploded can you?

Brian of TX 8:50PM June 07, 2009

Nice piece. It would be amusing, if it were not so frightening, to watch the "optimists" among us ever more strenuously deny that there are serious, systemic problems at work here. Some prefer to believe that this is a run-of-the-mill economic and social event, rather than one of historic impact. It is, for example, now fashionable to bash Nouriel Roubini, and proclaim that the few who were correct in identifying the risks leading up to this are doom and gloom types. Absolutely fascinating.
Geithner's plan is a hail Mary pass, and yes there is no Plan B. It's not impossible that it will work, but it is (IMHO) a long shot at best. We live in interesting times indeed when the President of the United States must, in a televised speech, deny that he is "coddling bank shareholders," and protecting the interests of bank management.
Optimism is great, but too much of anything, including optimism is not necessarily a good thing. This article is a decent, concise start at identifying a few of the real risks that lay ahead. Please keep it up, eventually people are likely to catch on.
All the best.

Richard of OR 7:10PM April 16, 2009

Rick we have a Dr Doom already in Roubini so perhaps you should get a more original shtick. Optimism is our problem? Perhaps you didn't notice the bloodthirsy media ringing the death knell for the economy for the past six months.Anyone remember the frenzy over Y2K? How did that turn out? I see a lot of pain and uncertainty out there but I also see people shopping, eating out, going to sports events and living their lives. Yeah, we needed a value readjustment but we don't need to be so scared out of our minds that we hide in cellars with cans of beans. The reason there is no plan B is because no one has dealt with these kids of assets before. The administration is doing the best that they can with what they have Anyone who says they have the 100% foolproof solution is deluded. Let's see what happens before we burst forth with criticism.
I used to like this blog and think that it was balanced but after this week I'm totally done until you go on anti-depressants.

CP of VT 11:36PM April 10, 2009

Easily half of these posts are ridiculous, outlandish assumptions as to how the "US financial system works". I'd like to know how many of the posters who've already replied have legitimate financial literacy, and aren't on some sort of political/personal vendetta.
If you understand how financial systems work, you might understand how the 'bail-outs' are needed for the banks to continue lending. You might understand how and why the new regulations are needed to make sure that the government money given to these institutions is used correctly.
BN of GA - Unemployment figures trail months in the past. If you look at unemployment figures by state or region, things make sense. Areas where the economy was based on growth or tourism are the worst off at this point. Makes sense, as these were the areas who benefited most from the run-up on real estate, and now they're catching the other end of the run-up. Trailing unemployment figures cannot be taken out of context and used to assume business is getting worse.
Muser - I agree that Geithner has no choice but to go "all-in" on whatever plan he's currently touting. If he didn't, he'd get railed for not being behind the plan, and it would fail regardless of how good is was.
Rich of CO - Keep drinking the kool-aid. Hyperinflation? Right now we're in a point of deflation. As of now, the outlook of inflation is appropriate, but as long as the government responds in a timely manner and raises interest rates according to inflation in a measure to keep it down, we shouldn't have to worry. Get a hold of yourself. I would hold off on assuming that this government has not learned from GWB a la 2003-2005, when interest rates should have been raised but weren't, resulting in monstrous growth and run-ups in some sectors.
Chris Petty - Brilliant. Really. Experience is the only way to measure someone. Seriously? Come on. A lot of people working for and with Obama have LOTS of experience. The government spending at this point is needed to jolt growth in the economy, and when that growth occurs, the taxes put in place now will recoup some of the expenditures from the government.
Judging by what you guys are saying, Some of you would rather build a camp in Canada and hole up there. If you ask me, go for it. But when things come back, and you come out of your holes and see that everything didn't go under...
Get a hold of yourselves. This stuff has happened before, the government is doing what it can to keep things going in the direction that will benefit citizens, and things will come back.

Josh of FL 10:56AM April 09, 2009

We must keep our hope in the American people. We must believe that by working together we can make a change. The government must truly listen to the people. We need jobs and American cars of top quality. We need more education. We need to save our homes and stop absolute greed! We need to be concern for all Americans. The rich need to rethink what they are doing to help the economy. We will get through this by working together.

Dr.James A. Lee of IL 12:06AM April 09, 2009

The majority of people that know anything about money or how to create jobs are terrified. No reason for optimism when our Government has no idea of what it takes to make it the real world. You cannot spend your way out of debt and BOTH of our presidential candidates labled GWB as a big spender. McCain I believed, Obama WAS an unknown. I feel as though the USA is in some horrible college experiment in economics since that's the only "experience" Mr Obama has. He has never run a State,City,Town or Hamlet. He's never started or owned a business or had to make payroll. What were you people thinking?
There is no "backup plan". They've already spent our money, our children's money, our grandchildren's money. this has all been done before and it has never worked. The difference this time is the enormity of this foolish deficit "experiment".
Even if we somehow limp our way through this, the USA will be forever weakened with debt and the American dream, only a shadow.

Chris Petty of GA 10:23PM April 08, 2009

Face it! We're screwed! Thanks to the career politicians.
Term Limits, PLEASE

Don Ho of NE 9:43PM April 08, 2009

The free market solves all economic problems eventually. The problem is that most people don't want to wait for "eventually", and they clamor for the politicians to "do something". So they do. That is when the real problems begin. OK, so you don't want the banks to go under, or at least not all of them at once. But a few going under is probably a good warning for future generations of bankers and stockholders.

James Fox of PA 8:03PM April 08, 2009