posted on August 30, 2002 03:38:54 PM new
There won't be any taxes to cover this. What will happen is that the EU will put tarrifs on US goods coming into the EU and/or ban some outright.
But we may be "taxed", if you will, by lost jobs and an even worse economy.
posted on August 30, 2002 04:41:34 PM new
REAMOND: Are you suggesting that illegal corporate tax breaks (aka welfare) are good for the common American worker?
posted on August 30, 2002 09:32:46 PM new
I recently had a horrible suspicion that complete and total collapse of our economy is on the way. Take the Stock Market for instance. When it goes low, the Fed steps in and uses a SECRET METHOD to bring the fallen market back up. That made me wonder exactly what the "secret" was and that's when I got sick to my stomach. There are only two reasons that I can think of that this process would be secret: 1) if the investors knew what it was, they would either rely upon it or run away in fear of it; and 2) if the general public got wind of it, there'd be a lot of screaming and shouting and heads would roll. My guess is that the 'Fed' takes billions of taxpayer dollars and invests it into the stock market, causing prices to rise. This restores investor confidence and they join in, making the market rise even more. As the market reaches a 'safety point', the Fed begins to slowly withdraw the money from the market to recover the money. Sound like a good practice if true? What happens when insiders purposely keep the market in a sharp downward spiral? The Fed would continue to pump billions upon billions of taxpayer dollars into scheme, all the while loosing the entire sum of money, just like a casino bet in Las Vegas! Because they will not reveal what the secret method is, there can be no objections from the investors and the general public and no overt oversight of the funds.
posted on August 31, 2002 06:05:07 AM new"When it goes low, the Fed steps in and uses a SECRET METHOD to bring the fallen market back up"
LOL. It's no secret, and that's exactly what they do - artificially boost the market for a day or two to try to bring in investor money. It's why there are periodic spurts, always heavily reported with enthusiastic predictions. It used to work pretty good for Greenberg, covering occasional dips, but now all it seems to result in is a mad dash by investors to take the opportunity to recover some small portion of their losses by selling during the phony spike. The market then goes lower than it was before the boost.
posted on August 31, 2002 11:07:35 AM new
>The market then goes lower than it was before the boost.
Meaning that the $Billions$ of Taxpayer Dollars pumped into the system by the Fed are gone! >>POOF!<<
Where do they keep getting the money?
They get it by BORROWING and putting us further into debt!
And it isn't for the small investor that they are doing this, BTW. They are doing this as a Federal Insurance Plan for the super-large investors . . . you know, the 1% of wealthiest Americans? The ones that the Demopublicans represent exclusively?
posted on August 31, 2002 12:27:10 PM new
The Fed has been pumping billions into the stock market to cover all the people taking billions out of mutual funds as well as the Saudis withdrawing investments.
The Fed "loans" the money to the brokerage houses to prop the stock market up. Then when the market settles, the brokerages sell the holdings over a long time period and pay the Fed Reserve back. You can watch the purchases happen almost daily in the market. You'll see a spike up in the index as the brokerages buy, and then a fall in the index as the public doesn't respond.
nycyn- There is nothing "illegal" about the tax breaks- the WTO has just allowed retaliation for them, we do the same thing to other countries, that's how the WTO works.I wouldn't mind doing away with taxes for US corporations/businesses IF it would produce higher wages and lower product prices and our income tax system wasn't so skewed towards the wealthy. But in a world economy, out tax system, just like our wages, are in competition with the rest of the world. How can the US worker and corporation compete when they have to support the US public education system, public transportation system, and all other tax funded infrastructure, when their counterpart in Asia or Mexico doesn't have to be taxed to support infrastructure at the levels we do ?
If the US keeps doing things the same way, it will produce a third world underclass right here in the US ( some would argue it already has). In effect, the only thing the world economy is doing is creating a desperate underclass more evenly distributed in the industrialized countries, it is not creating growth. I think we need a cabinet level department that can manage the international trade situation better or else begin barring or tarrifing imports to pay for US public funded infrastructure.
High tech was supposed to provide employment in the US as manufacturing jobs went to Asia and Mexico. However, it has become quite clear that high tech will not provide the high wage/value added jobs that they thought it would. In fact, high tech has provided efficiencies that will make the jobs available even fewer.
We either have to have more poverty here in the US or place roadblocks on imports and exporting jobs. Believe it or not, F%ckedcompany had a post the other day that stated Frito-Lay will be moving their snack food production to China. Think of that- it is cheaper to produce the snacks in China and then ship them half way around the world to the US than to produce them here. As China becomes more efficient at applying its vast work force, things will get much worse.
We could very well be heading for a world wide depression. But it will be far different than the last one. I don't think people in the US will set idle and blame themselves as their children starve to death or are denied basic necessitites. For that very reason, the Fed and everyone else will do anything and everything possible to prevent a depression.
posted on August 31, 2002 11:42:42 PM new
Well, my question is, is that if the process is so well known to the public, then how come the media was making such a deal about the "secret method" the Fed does to prop up the stock market? Sheese!
posted on September 1, 2002 09:35:44 AM new
>>We could very well be heading for a world wide depression. But it will be far different than the last one. I don't think people in the US will set idle and blame themselves as their children starve to death or are denied basic necessitites. For that very reason, the Fed and everyone else will do anything and everything possible to prevent a depression.<<
REAMOND: I posted something like this yesterday, but it didn't make it.
So what's the best assets to have during such times? Travelers Checks under the rug? Spots? Frito-lay stock? Go with flow attitude? Tack the IRS hit and withdraw any TDA funds?
I'm becoming mature enough to start thinking about Planning For The Future. Well, The KIds ultimately.
posted on September 1, 2002 10:05:46 AM new
In a depression you want cash, and as few assets as possible. Assets will lose their value in a depression. However, if the Fed and govt tries to monetize the problems, which it seems to be doing, you'll want assets that will track or out perform inflation, such as realestate and some gold.
The current mystery is why we aren't seeing inflation. The Fed has pumped the money supply up and we are back to Fed deficits and nearly every state is having budgetary short falls. Yet there is no pricing flexibility in goods and services(no one can raise prices because competitors will keep their prices lower). The immediate thinking may be that we have way too much production capacity in the markets which means companies must contract or go out of business, or consolidate by purchasing competitors. But I think it is too early to count out inflationary problems over the near horizon. An inflationary recession is much more easy to manage than a depression, so odds are that is where the Fed actions will take us.
There is also the argument that we are only seeing a "continental drift" economy. Just as Japan had a huge upsurge in the 1980s, then the US in the 1990s, now it is Europes turn in the 2000s. With Japan they say it was caused by highly efficient manufacturing , with the US it was high tech, and some would say that with Europe it will be the forming of the EU. But I'm not convinced of any of this.
posted on September 2, 2002 04:36:07 PM new
Investment advice from a boating magazine...
"I was hanging around the docks the other day when a fellow boater asked me how my portfolio was doing and did I have any advice for him. I answered this way:"
"If you had bought $1000 worth of Nortel stock one year ago, it would be worth $49."
"With Enron you would have $16.50 of the original $1000."
"With WorldCom, you would have less than $5 left."
"On the other hand, if a year ago you had bought $1000 worth of Budweiser (the beer, not the stock) drank all the beer, then turned in the cans for the recycling money, you would have $214."
Based on the above my current investment advice is to drink beer and recycle.
posted on September 2, 2002 05:37:25 PM new
>>Based on the above my current investment advice is to drink beer and recycle.<<
LOL!
Helen: You have no idea how right you are. I am very fortunate to have this retired ww2 kid Ukrainian woman who takes The Kid to school. I don't know how I would live without her. And even if she isn't needed she still waltzes in with her key, which is never a problem as it is never an inconvenient time. But I think she is the one who thinks she's the lucky one. Not only does she get my bottles, she has total access to that cornucopia of the recycling/non-refuse "garbage area". She is absolutely addicted to collecting cans and bottles for the refunds, and drags this contraption for lugging them everywhere. She goes shopping for me just to bring some dignity to it all at "my" supermarket. Now having a "trash addiction" myself, I haven't a care as to what the neighbors think. But sometimes she PO's me off when she strays into my territory and tells me look what *I* found. And I think, that's it, I'm taking her key. Anyway, she's probably worth millions, bless her heart.
posted on September 3, 2002 07:34:19 AM new
From the Thread Link above:
"The WTO considered the request from the EU after ruling last year that a system of tax breaks for companies from the United States was an illegal subsidy and violated international trade rules."
"The U.S. program, known as "Foreign Sales Corporations," allows U.S. companies with a foreign presence to exempt between 15 percent and 30 percent of their export income from U.S. taxes."
This is a bullsh1t complaint, IMO. Where was the WTO during the 1960's and 1970's when Nixon sold the U.S. television industry to Matshusta, Inc of Japan? Where was the WTO when in the early 1980's, Ronald Reagan sold our entire electronics industry to Japan? And each time after that, Japan not only fully reimbursed their companies for the tariffs and taxes that they incurred to import their electronics wares into our country to compete with American firms, but also gave them extra funds to cut the selling prices in half of what they should have been?
In the meantime, we STILL pay 100% of the defense of Japan AND Germany each year! What about that?
posted on September 3, 2002 09:47:17 AM new
All assets, including stocks lose their value. Few people will be buying because many will have lost their jobs, and the rest may be making less money.
Think of a depression as a major over supply of everything but money. Things get cheaper, so those with cash can snap up assets at bargain prices. Suppose a company just bought a $5 million machine that made widgits that sell for $5 each. All of a sudden the widgits are selling for 5 cents each. This has a devastating effect twice over. You can not make a profit by selling the wiidgits, and your $5 million piece of equipment is now practically worthless. Huge amounts of capital equipment becomes idle and not really worth selling.
The same thing happens to the "household" economy. Things people worked their life for become devalued, such as their home(s), stock portfolios, furniture etc..
Once this happens, even flooding the money supply won't help until the undervalued assets, bad debts etc., are purged from the market. This is the problem with Japan and why some claim Japan is in a depression, Japan will not purge the system of bad debts etc..
But odds are that the Fed will not allow the economy to go that way. An inflationary economy is much more easy to manage. It is somewhat like a doctor comparing which patient he would rather treat,either a manic mental patient or a patient that has no pulse. There are a lot of tools to effectively manage a manic economy, but there are few for an economy DOA with no pulse.
Edited to add- Just heard yesterday that the third largest freight carrier in the US is filing for bankruptcy- Consolidated Freightways. The other freight haulers stock is up because CF is liquidating under Chap 11. Freight hauling volume going down is a good indicator of the state of the economy.
[ edited by Reamond on Sep 3, 2002 10:03 AM ]
