Doom and Gloom
 

tldr

Chinese government sucks.

Well, so far it's looking like a relatively mild recession, despite the fact that this may indeed be a once-in-a-lifetime event in housing.

Fortunately, even though the financial system might be subprime, the corporate sector is still very healthy.

Well, emerging market is certainly in a meltdown. Hot money is flowing back to the US, and gives boost to US$ and Nasdaq.

He applauded when the Federal Reserve cut interest rates to 2 percent from 5.25 percent beginning last summer. He also supported the Fed’s willingness to engineer a takeover of Bear Stearns. Roubini argues that the Fed’s actions averted catastrophe, though he says he believes that future bailouts should focus on mortgage owners, not investors. Accordingly, he sees the choice facing the United States as stark but simple: either the government backs up a trillion-plus dollars’ worth of high-risk mortgages (in exchange for the lenders’ agreement to reduce monthly mortgage payments), or the banks and other institutions holding those mortgages — or the complex securities derived from them — go under. Liquidity Backstops http://www.discussworldissues.com/fo...ons/icon13.gif

Corporations appear to be doing well, in part, based on some very suspect derived numbers related to productivity. How to measure the productivity of office workers who do not themselves produce anything is very arcane. Within that arcane realm these measurements are very very controversial.

Much US international debt (dollars held in currency reserves) is held by governments that are also our rivals or our customers. If one of those nations panics economically or moves into revolt, we would be hard pressed to sustain our currency. What are the odds that revolts will occur in China, Russia, the Middle East, or Japan? Not extremely high except for the Middle East.

We also have significant consumer debt as well, unsustainable if labor demand continues to fall. Lots to be pessimistic about. What we know for sure is that no empire lasts forever. US is really in its 60's, and most empires last longer than that. But crisis after crisis slowly wears away the lead until another power emerges.

There is this guy who has been claiming economic collapse forever and now wants to pretend that his years of being wrong are vidicated by him coincidentially being right.

Normally I don't pay a lot of attention to the doom and gloom economists, but since this got in the Times . . .