US economy may be entering a recession

[DaisyDay]

The housing market had crashed. This began under the Bush administration. Banks were issuing loans that borrowers couldn't repay for their mortgages. And that resulted in a chain reaction of issues in which, as banks failed, businesses couldn't borrow money for large-scale projects, and couldn't pay their employees, which led to layoffs and so on and so on.

It was more than that, it was the trend of bank deregulation. Iceland deregulated in 2001 which allowed banks to dabble in foreign currency - Iceland had the first major banking failures in 2007. In America, commercial banks could start issuing securities. Many new banks for online banking were newly established globally.

The banks had lobbied Congress to change the banking rules to allow commercial banks to issue securities. So rather than depend on each individual mortgage, the banks "bundled" the mortgages together and sold shares of the derivatives. This brand new security was enormously popular to the point that the banks were desperate for more mortgages to bundle. Because the risk of each individual new mortgage was spread throughout the entire bundle, banks started to issue increasingly risky mortgages, including balloon mortgages (5% down 0% interest for five years ballooning to 10% on year 6, for example) to people with little or even bad credit histories. Naive customers were lured into deals they couldn't afford on the assurance that housing prices always rise (they don't). The banks needed hundreds of thousands of new mortgages to keep issuing these securities. They got them. Worse, they used much of it to borrow against (leverage).

The market in these new securities attracted the notice of speculators who noticed that these securities' had very little actual collateral backing them up and many were due to balloon at the same time, so they shorted them (borrowed and sold the securities at the current, high price then, after the price dropped, which it did precipitously, buy the now-discounted stock to return).

When the mortgages began to fail and what the banks borrowed against them came due, the banks, like Lehman Brothers and Bear Sterns, went bankrupt. Globally banks failed, not just in America.

 

[iluvatar5150]

When the mortgages began to fail and what the banks borrowed against them came due, the banks, like Lehman Brothers and Bear Sterns, went bankrupt. Globally banks failed, not just in America.

I've long wondered how much of that fallout could've been avoided if the rating agencies had rated the risk of the securities correctly.

 

[ThatRobGuy]

Or Bannon simply took advantage of a weakened and damaged democracy. A vulture is not an eagle.

That's another thing...

Suggesting that democracy was "damaged"/"weakened" simply because the team one doesn't like won in 2016 is the kind of defeatist pessimistic view that's going to undermine voter confidence and actually end up damaging it.


I think Democrats in the US got too complacent. They weren't challenged much in 2008 and 2012 in terms of opposition candidates, and were able to coast to victory. That's not a personal dig on McCain or Romney, they were nice guys, but they certainly weren't "counter-punchers" by any means.

"The Hallmark of a healthy democracy is when Republicans put up someone who's easy for us to beat" combined with that saying about "If you want to know what the current Republican positions are, just look and see what the Democratic positions were 10 years ago"

...simply wasn't a realistic long-term standard.


The reality is, Republicans had been conceding and losing ground on some of social issues for over a decade, how long were people honestly expecting them to keep going along with the "status quo"?


I've used the analogy before that it was somewhat reminiscent to Mike Tyson's boxing career.

The fights used to be all but predetermined with Don King arranging to have him run through a bunch of shlubs. There's only so many times that "easy win" pattern will happen before A) Tyson gets a little lazy and complacent, and as a result, B) Buster Douglas shows up and unexpectedly puts him down much to everyone's shock.

 

[FireDragon76]

That's another thing...

Suggesting that democracy was "damaged"/"weakened" simply because the team one doesn't like won in 2016

That's your assumption. I'm just basing it off what actual experts in studying failed societies have to say, like Barbara F. Walter. She used to work for the CIA researching countries that experienced civil war.

 

[ThatRobGuy]

That's your assumption. I'm just basing it off what actual experts in studying failed societies have to say, like Barbara F. Walter. She used to work for the CIA researching countries that experienced civil war.

I would think one would have to establish causal vs. unjustifiably reactionary...and overlay that on the chain of causality.


To explain better what I'm referring to.

Hypothetical:
If I go bust out your car windows with a hammer, and you react to that by coming over to my driveway and punching me in the mouth

vs.

If I merely say your car sucks, and you react to that by coming over to my driveway and punching me in the mouth


The fact that both actions drew out the same identical violent reaction doesn't mean "busting out someone's car windows" and "insulting someone's car" should be viewed (by reasonable people) as being on-par with each other in terms of provocation or divisiveness.

Sort of a variation of the "Argument from Outrage" fallacy.

Person A does something wrong.

Person B gets angry.

Person B wants the wrongness of A’s actions judged based on how angry it made them.


That's why, I would imagine that in any actual civil war, both belligerents will proclaim that "those guys started it" and conflate their own anger about not getting their way with some sort of moral justification for fighting.

 

[Bradskii]

It's fine to dislike Bannon, he's a slimy, shifty, underhanded character who has little in the way of scruples...

Yeah, all of that. And I think you're being too kind to the guy. But this is his political 'ideology'. This is his MO. This is what he thinks actually works. And bear in mind that this one of the guys who is telling Trump what he should be doing:

"All we have to do is flood the zone," he said. "Every day we hit them with three things. They'll bite on one, and we'll get all of our stuff done, bang, bang, bang. These guys will never — will never be able to recover. But we've got to start with muzzle velocity."

That was from here: https://www.npr.org/2025/02/07/nx-s1-5289315/trump-week-in-review

Do you think that's the smart way to run a country? Because that's what these people are supposed to be doing! Well, me - just personally mind you, thinks it's idiotic. I lived through the Thatcher years. And if you tie me to a chair and beat me with a rubber hose I will eventually accede that she knew what she was doing. I will agree that there was a plan. That it was well thought out by incredibly smart people. I just abhored what it meant for the UK.

But Trump and his 'advisors'? There isn't even a concept of a plan. It's just ideology.

 

[Bradskii]

The reality is, Republicans had been conceding and losing ground on some of social issues for over a decade, how long were people honestly expecting them to keep going along with the "status quo"?

You mean how long before they came to realise that this is what the people wanted?

I honestly don't know about you. But I vote for the party that reflects my values. And I expect my party to accept, and then reflect the will of the people. What I don't expect is that a few people will try to game the system so that the people must end up accepting the will of the party.

That ain't democracy. It's a failure of democracy.

 

[Bradskii]

Who else here is having a pleasant afternoon after doing some "buying the dip" over the past few days?

We might find that out: Trump ignites ‘insider trading’ accusations after global tariffs U-turn

'Donald Trump is facing accusations of market manipulation after posting on social media that it was a “great time to buy” just hours before he made a dramatic U-turn on his trade war that led to big rises in stock markets around the world.

Shortly after US markets opened on Wednesday morning, Trump wrote on his social media platform Truth Social: “THIS IS A GREAT TIME TO BUY!!! DJT”.

Less than four hours later, he shocked investors by announcing a 90-day pause on additional trade tariffs on most countries except China, sending share indexes soaring.'

That stinks to high heaven.

 

[ThatRobGuy]

You mean how long before they came to realise that this is what the people wanted?

I honestly don't know about you. But I vote for the party that reflects my values. And I expect my party to accept, and then reflect the will of the people. What I don't expect is that a few people will try to game the system so that the people must end up accepting the will of the party.

That ain't democracy. It's a failure of democracy.

Perhaps that's a luxury of the parliamentary system that doesn't exist over here

Parliament of Australia - Wikipedia

en.wikipedia.org

We, for all intents and purposes, get 3 choices: Republican, Democrat, Couch


In a two-party system, the people typically end up voting for the team that has a higher level of overlap, which gives the parties wiggle room in terms of being able to "go into business for themselves" and outflank their party's voters (ideologically) on the basis of "What are you gonna do? vote for the other guys?"



Per Politico:

It would appear that at the current juncture, it's the Democrats who feel they're not being well-represented by their respective party in congress. The republicans seem to be fairly happy with their representation at the moment.

 

[loveofourlord]

Perhaps that's a luxury of the parliamentary system that doesn't exist over here

Parliament of Australia - Wikipedia

en.wikipedia.org

We, for all intents and purposes, get 3 choices: Republican, Democrat, Couch


In a two-party system, the people typically end up voting for the team that has a higher level of overlap, which gives the parties wiggle room in terms of being able to "go into business for themselves" and outflank their party's voters (ideologically) on the basis of "What are you gonna do? vote for the other guys?"



Per Politico:
View attachment 363422

It would appear that at the current juncture, it's the Democrats who feel they're not being well-represented by their respective party in congress. The republicans seem to be fairly happy with their representation at the moment.

yeah that couldn't have anything to do with all the damage trump is doing, and democrats only now starting to try to do something about it?

 

[ThatRobGuy]

yeah that couldn't have anything to do with all the damage trump is doing, and democrats only now starting to try to do something about it?

I'm pretty sure their laser focus, for the last 4 years, has been on throwing everything but the kitchen sink at the mission of denying Trump a second term in office.

What else would you have liked them to do with regards to that goal?


I was one of the people who chose "couch" in this last election because I didn't care for either option.

But, I'm certainly open to voting for Democrats, I've done it numerous times in the past, but they have to bring something to the table.

I rolled the dice and voted for Biden in 2020 because the promise was "a return to normalcy and moderation"

In reality, things just seemed to get weirder over the time period. And for all the talk about "Republicans don't put up serious people and don't treat this whole thing seriously", I spent the final 2 years of his presidency watching a man who was clearly in decline & bumbling around, while having a bunch of pundits an party loyalists insisting that wasn't the case, only to finally acknowledge it at the last possible moment, and then hot-swapped him out for the person who was dead last in the previous election cycle's primary.

To me, that's not taking it seriously, either.

 

[loveofourlord]

I'm pretty sure their laser focus, for the last 4 years, has been on throwing everything but the kitchen sink at the mission of denying Trump a second term in office.

What else would you have liked them to do with regards to that goal?


I was one of the people who chose "couch" in this last election because I didn't care for either option.

But, I'm certainly open to voting for Democrats, I've done it numerous times in the past, but they have to bring something to the table.

I rolled the dice and voted for Biden in 2020 because the promise was "a return to normalcy and moderation"

In reality, things just seemed to get weirder over the time period. And for all the talk about "Republicans don't put up serious people and don't treat this whole thing seriously", I spent the final 2 years of his presidency watching a man who was clearly in decline & bumbling around, while having a bunch of pundits an party loyalists insisting that wasn't the case, only to finally acknowledge it at the last possible moment, and then hot-swapped him out for the person who was dead last in the previous election cycle's primary.

To me, that's not taking it seriously, either.

more like pushing for congress to have power to veto tariffs, fighting back against stupid doge cuts, fight more against tax cuts for the rich,

 

[ThatRobGuy]

more like pushing for congress to have power to veto tariffs, fighting back against stupid doge cuts, fight more against tax cuts for the rich,

There's only so much a party can do when they don't have a majority in either house of the legislature.

If they wanted to have that power to be a bulwark on the economic front, they should've probably given it some more thought before they pushed for non-economic policy proposals that were off-putting to over half of Americans.

They took a handful of issues, that were either 60/40 or 70/30 issues, and gift wrapped them and handed them to the GOP.

The fact that for the first time in decades, organized labor outfits either declined to endorse the Democrats...and a few even endorsed Trump, should've been a huge eye-opener. (half of the DNC should've gotten fired upon getting the news that not only was the Teamsters declining to endorse them, but that their president was going to be a keynote speaker at the RNC convention)

There is a tipping point with regards to how much a person's own economic interests will outweigh their positions on other issues. Democrats found that tipping point.

Don't get me wrong, the DNC got a lot of mileage out of Carville's "it's the economy, stupid" tagline...but it's obvious that there are limits to that sentiment.


Some other factoids (courtesy of the Associated Press) that are worth consideration...

According to AP VoteCast, Trump increased his support among Black voters to 16% in 2024, up from 8% in 2020. His support among Hispanic voters also grew, from 35% in 2020 to 42% in 2024. These shifts suggest that some voters who previously supported Democratic candidates chose to vote for Trump in 2024.

Additionally, an analysis of 2024 election results found that while 91% of voters who selected Republican candidates for Congress and the General Assembly also voted for Trump, only 79% of those who chose Democratic candidates did the same for Kamala Harris. This indicates that a portion of Democratic voters either voted for Trump or declined to cast a vote for the presidential election.

 

[loveofourlord]

There's only so much a party can do when they don't have a majority in either house of the legislature.

If they wanted to have that power to be a bulwark on the economic front, they should've probably given it some more thought before they pushed for non-economic policy proposals that were off-putting to over half of Americans.

They took a handful of issues, that were either 60/40 or 70/30 issues, and gift wrapped them and handed them to the GOP.

The fact that for the first time in decades, organized labor outfits either declined to endorse the Democrats...and a few even endorsed Trump, should've been a huge eye-opener. (half of the DNC should've gotten fired upon getting the news that not only was the Teamsters declining to endorse them, but that their president was going to be a keynote speaker at the RNC convention)

There is a tipping point with regards to how much a person's own economic interests will outweigh their positions on other issues. Democrats found that tipping point.

Don't get me wrong, the DNC got a lot of mileage out of Carville's "it's the economy, stupid" tagline...but it's obvious that there are limits to that sentiment.


Some other factoids (courtesy of the Associated Press) that are worth consideration...

According to AP VoteCast, Trump increased his support among Black voters to 16% in 2024, up from 8% in 2020. His support among Hispanic voters also grew, from 35% in 2020 to 42% in 2024. These shifts suggest that some voters who previously supported Democratic candidates chose to vote for Trump in 2024.

Additionally, an analysis of 2024 election results found that while 91% of voters who selected Republican candidates for Congress and the General Assembly also voted for Trump, only 79% of those who chose Democratic candidates did the same for Kamala Harris. This indicates that a portion of Democratic voters either voted for Trump or declined to cast a vote for the presidential election.

actually guess what, thats when they can do the most damage to the GOP, when most american support X, you push for x even if you know you will lose, force the GOp to vote against things that will cost them the next election.

 

[BeyondET]

We might find that out: Trump ignites ‘insider trading’ accusations after global tariffs U-turn

'Donald Trump is facing accusations of market manipulation after posting on social media that it was a “great time to buy” just hours before he made a dramatic U-turn on his trade war that led to big rises in stock markets around the world.

Shortly after US markets opened on Wednesday morning, Trump wrote on his social media platform Truth Social: “THIS IS A GREAT TIME TO BUY!!! DJT”.

Less than four hours later, he shocked investors by announcing a 90-day pause on additional trade tariffs on most countries except China, sending share indexes soaring.'

That stinks to high heaven.

It would if his family or his administration actually engaged in trading. But the law is people are innocent before being found guilty, so no it doesn't stink to high heaven just because dems are out for blood and found him guilty the moment he stepped into politics.

 

[Canuckster]

It would if his family or his administration actually engaged in trading. But the law is people are innocent before being found guilty, so no it doesn't stink to high heaven just because dems are out for blood and found him guilty the moment he stepped into politics.

The market goes down, it's Trump's fault. The market goes up, it's Trump's fault. What a spectacle.

 

[loveofourlord]

The market goes down, it's Trump's fault. The market goes up, it's Trump's fault. What a spectacle.

gee you think suddenly people trading before the announcement, and trump saying, "Buy." before he announces it doesn't sound a bit planned to make mney? him trying to get rich makes more sense then any of his excuses.

 

[7thKeeper]

It would if his family or his administration actually engaged in trading. But the law is people are innocent before being found guilty, so no it doesn't stink to high heaven just because dems are out for blood and found him guilty the moment he stepped into politics.

Now that's a naive take if there ever was one.

 

[BeyondET]

Now that's a naive take if there ever was one.

It's apparent you know nothing about the United States.