Let's talk about economic collapse

rjs330 · Apr 24, 2020

KCfromNC said:
I'll repeat - These sorts of arguments would probably gain more traction if they were also made when Donald decided to run up the debt to give money to rich people.

They are not arguments. They are facts. No one was concerned over the debt. And haven't been for years. Now we are signing bigger bills to provide more And more money. If the US collapses so will the rest of the world.

No one will be buying anyone's debt. Inflation will run rampant. It will cost $50 or more for a loaf of bread. People won't have jobs. How's that going to go for ya?

I would think you'd have a bit more concern over the human toll that will take. Far more deadly than this stupid virus.

rjs330 · Apr 24, 2020

ZNP said:
I have a pretty good idea.

16 I heard, and my belly trembled; My lips quivered at the voice; Rottenness entered into my bones, and I trembled in my place, That I might rest in the day of distress, When their invader shall come up against the people.

First of all we are looking at tremendous political instability. Imagine Russia has no revenue to run their country, Revenue from foreign trade collapses in China, despotic regimes that are run on oil revenues are in revolution, and with trillions to pay for this virus the US cannot afford to be the world's policeman.

17 For though the fig-tree shall not blossom, Neither shall fruit be in the vines; The labour of the olive-tree shall fail, And the fields shall yield no food; The flock shall be cut off from the fold, And there shall be no herd in the stalls:

Our agriculture is completely dependent on oil. We make pesticides and herbicides, we do everything with machinery run on oil, we deliver food to market, everything. Oil prices spike food is more expensive, but we aren't talking about that, we are talking about cutting oil production in half. In that situation the military will need more oil, not less. Other industries will be able to afford to pay top dollar. Many of these farms won't. This means famine in the 3rd world, and inflation in the US.

18 Yet I will rejoice in Jehovah, I will joy in the God of my salvation.

What we are seeing today happening to the US is no worse than what happened to Egypt at the time of Pharaoh and Moses, or what happened to Israel at the time of Jezebel and Elijah.

19 Jehovah, the Lord, is my strength, And he maketh my feet like hinds' [feet], And he will make me to walk upon my high places. To the chief Musician. On my stringed instruments.

The economy and the US government is not my strength, oil is not my strength, the Lord is my strength. He is the God of resurrection. I will trust in Him.

Amen and Amen.

ZNP · Apr 24, 2020

Is unemployment really as deadly as coronavirus?

Here’s the paragraph from Thomas’ book that applies: “According to one study [the one by Bluestone et al.] a 1 percent increase in the unemployment rate will be associated with 37,000 deaths [including 20,000 heart attacks], 920 suicides, 650 homicides, 4,000 state mental hospital admissions and 3,300 state prison admissions.”

https://nypost.com/2020/04/20/explaining-the-link-between-unemployment-deaths-amid-coronavirus/

ZNP · Apr 24, 2020

In the movie the Big Short they say repeatedly that the mortgages can't fail, that it would take 10 million people to lose their homes for it to collapse. It occurred to me that 28 million have recently become unemployed and a whole lot of small businesses are in danger of going bankrupt.

Another whammy to the mortgage market is that I have heard many of these large corporations who have people working from home realize they don't need such a large commercial real estate footprint. they are considering scaling back their leased commercial space and that this could be a very big impact to the real estate market.

A third whammy, malls were already struggling, but with everyone going online this could push many of the marginal ones into bankruptcy. Especially since many of their tenants will probably also go belly up.

ZNP · Apr 25, 2020

Isaiah 35:4

“Say to those who have an anxious heart, ‘Be strong; fear not! Behold, your God will come with vengeance, with the recompense of God. He will come and save you.’”

ZNP · Apr 25, 2020

Coronavirus Has Popped the Boeing and Airbus Bubble

(Bloomberg Opinion) -- It’s not just air tickets that are being canceled as the coronavirus causes global travel to seize up. Purchases of aircraft are also being pulled.

Aircraft lessors Avolon Holdings Ltd., China Development Bank Financial Leasing Co., and General Electric Co.’s GECAS have rescinded orders for 173 Boeing Co. 737 MAX aircraft over the past month, worth $17.8 billion at list prices. Airbus is cutting output of planes by a third, while Boeing will reduce production of 787 Dreamliners by half, people familiar with the plans told Julie Johnsson and Siddharth Philip of Bloomberg News.

There’s likely to be more to come. The global aviation industry is being hollowed out by the prospect of international and domestic travel grinding mostly to a halt for 18 months or so: The International Air Transport Association expects traffic to decline by 48% this year because of the coronavirus.

Coronavirus Has Popped the Boeing and Airbus Bubble

In fierce anger He has cut off All the strength of Israel;

He has drawn back His right hand From before the enemy.

And He has burned in Jacob like a flaming fire Consuming round about.

Lamentations 2:3

ZNP · Apr 25, 2020

And according to the Economic Policy Institute, each manufacturing job supports almost three other jobs in the economy.

Speaking on background, a Boeing official said several thousand employees are expected to take the voluntary layoff package or retire

over 1.7 million people are employed by the auto industry. In addition, the industry is a huge consumer of goods and services from many other sectors and contributes to a net employment impact in the U.S. economy of nearly 8 million jobs.

Toyota (TM) reported results for both March and the quarter. Its daily sales pace plunged 32% in March, while its overall sales in the month fell 37%, hurt in addition by one fewer sales day in the month.

Jeremiah 17:7-8
“Blessed is the man who trusts in the Lord, whose trust is the Lord. He is like a tree planted by water, that sends out its roots by the stream, and does not fear when heat comes, for its leaves remain green, and is not anxious in the year of drought, for it does not cease to bear fruit.”

variant · Apr 25, 2020

rjs330 said:
They are not arguments. They are facts. No one was concerned over the debt. And haven't been for years. Now we are signing bigger bills to provide more And more money. If the US collapses so will the rest of the world.

No one will be buying anyone's debt. Inflation will run rampant. It will cost $50 or more for a loaf of bread. People won't have jobs. How's that going to go for ya?

I would think you'd have a bit more concern over the human toll that will take. Far more deadly than this stupid virus.

The debt is the bond market. For the actual collapse to happen in the manner you are speaking of, we would have to not be able to pay the interest on treasuries, or people wouldn't want to buy US debt.

Right now the yield on the 10 year treasury is .5960% indicating that people are quite happy to lend the government the money it needs. Economic indicators actually say we are just as likely to go into deflation as inflation as a problem.

ZNP · Apr 25, 2020

variant said:
The debt is the bond market. For the actual collapse to happen in the manner you are speaking of, we would have to not be able to pay the interest on treasuries, or people wouldn't want to buy US debt.

Right now the yield on the 10 year treasury is .5960% indicating that people are quite happy to lend the government the money it needs. Economic indicators actually say we are just as likely to go into deflation as inflation as a problem.

Can you be a little clearer here? Are you predicting that the bond market will not collapse, we will not have inflation, and the economic toll will not be worse in the long run than the toll from the virus? Just want a clear prediction that we can then refer to in the coming months. Thanks

ZNP · Apr 25, 2020

There are 8 million people in the US who work in construction. With unemployment skyrocketing it is difficult to believe that there will be any demand at all for new housing construction. Likewise, with many businesses figuring out that their employees can work from home it seems there will not be any demand for commercial real estate either, on the contrary we should have a glut of both residential and commercial real estate. I also think that tourism and travel will take a very big hit this year.

It is like dominoes, when some go bankrupt it causes others to as well. There were 1.2 million foreclosures in 2006 which precipitated the mortgage meltdown in 2007.

In summary: Rising house prices, generally encourage consumer spending and lead to higher economic growth – due to the wealth effect. A sharp drop in house pricesadversely affects consumer confidence, construction and leads to lower economicgrowth. (falling house prices can contribute to economic recession)

KCfromNC · Apr 25, 2020

rjs330 said:
They are not arguments. They are facts. No one was concerned over the debt.

What are you even talking about? There were any number of sources concerned about the debt that Donald's tax cuts for billionaires would incur.

From different people now that money's going to other voters, of course.

rjs330 · Apr 25, 2020

KCfromNC said:
What are you even talking about? There were any number of sources concerned about the debt that Donald's tax cuts for billionaires would incur.

From different people now that money's going to other voters, of course.

I'm talking about no one has really been concerned about the debt in quite some time. For years the Republicans were concerned and then the Democrats didn't care. Then the Republicans stopped caring about it too. Then the Democrats started caring. If Congress really cared something would have been done long before now. Suddenly you care. Did you care b fire or was it only until Trump?

We should all care because right now we are going to be printing money. And if thats the case we are in for trouble.

variant · Apr 25, 2020

ZNP said:
Can you be a little clearer here? Are you predicting that the bond market will not collapse, we will not have inflation, and the economic toll will not be worse in the long run than the toll from the virus? Just want a clear prediction that we can then refer to in the coming months. Thanks

I don't yet have any indications that the bond market is about to collapse.

Quite the opposite actually, people have been buying bonds at a record pace. The rate of nearly half a percentage point is a ridiculously low amount of interest to ask for a 10 year security.

Deflation is no laughing matter either. When housing prices collapsed so did the economy, but we never got an inflationary spiral, but rather painful deflation.

So, there are other ways for economies to collapse/go through hardships. we've already gone through one in our lifetimes.

If I could give you exacting predictions I would be using such knowledge in my investments, not doing so for street cred on a message board...

Pommer · Apr 25, 2020

variant said:
I don't yet have any indications that the bond market is about to collapse.

Quite the opposite actually, people have been buying bonds at a record pace. The rate of nearly half a percentage point is a ridiculously low amount of interest to ask for a 10 year security.

Deflation is no laughing matter either. When housing prices collapsed so did the economy, but we never got an inflationary spiral, but rather painful deflation.

So, there are other ways for economies to collapse/go through hardships. we've already gone through one in our lifetimes.

If I could give you exacting predictions I would be using such knowledge in my investments, not doing so for street cred on a message board...

Aye, deflation is much worse.
(We haven’t seen systemic deflation for 90 years.)

ZNP · Apr 25, 2020

The Great depression began with an initial stock market crash that triggered a "panic sell-off" of assets, approximately 25% in 1929, that is very similar to the drop we just saw in the stock market this year.

This was followed by a deflation in asset and commodity prices, in our most recent example, oil dropping into negative dollar range.

dramatic drops in demand and credit, already we are seeing large contracts for airplanes being cancelled and new car sales dropping 30-40%. Likewise house sales have stopped.

and disruption of trade, in our current situation world trade is down at least 30% if not more.

ultimately resulting in widespread unemployment (over 13 million people were unemployed by 1932), in the last month we have seen the biggest spike in unemployment in the US ever, and it is probably quite similar around the world.

and impoverishment.

Trump promised to make America great again, one thing everyone needs to admit, Trump has done the things he promised he would do when he campaigned.

Pommer · Apr 26, 2020

ZNP said:
The Great depression began with an initial stock market crash that triggered a "panic sell-off" of assets, approximately 25% in 1929, that is very similar to the drop we just saw in the stock market this year.

This was followed by a deflation in asset and commodity prices, in our most recent example, oil dropping into negative dollar range.

dramatic drops in demand and credit, already we are seeing large contracts for airplanes being cancelled and new car sales dropping 30-40%. Likewise house sales have stopped.

and disruption of trade, in our current situation world trade is down at least 30% if not more.

ultimately resulting in widespread unemployment (over 13 million people were unemployed by 1932), in the last month we have seen the biggest spike in unemployment in the US ever, and it is probably quite similar around the world.

and impoverishment.

Trump promised to make America great again, one thing everyone needs to admit, Trump has done the things he promised he would do when he campaigned.

Well, after the crash of ‘29, there was a liquidity-crunch, followed by austerity measures at the Federal level.
The FDR/Keynesian model took the US off of “the gold standard” to free up the dollar, (which wasn’t yet the world’s fiat currency), and pumped massive amounts into the economy before the ‘34 midterms that put the brakes on and extended the recovery time because of “debt concerns”.

When a national government desires to juice the economy with sweet sweet money, it should go in at the very lowest level that there is, knowing that as it percolates up through the economy, changing hands, it generates more return that just what’s been “put in”.

ZNP · Apr 26, 2020

Pommer said:
When a national government desires to juice the economy with sweet sweet money, it should go in at the very lowest level that there is, knowing that as it percolates up through the economy, changing hands, it generates more return that just what’s been “put in”.

Yep, just like the Mortgage crisis. They gave $500 billion to those who had lost their homes. Then they went through the investment banks and bankers who had not acted according to their fiduciary responsibility, revoked their licenses, causing thousands to lose their jobs, and then they began the long arduous task of prosecuting the thousands who had flouted the laws protecting the common man. hahaha, just kidding!

What really happened is they took the money from those dumb chumps, the poor taxpayers, and gave it to the bankers, no one lost their job, no one got prosecuted, and they even continued to get big fat bonuses.

ZNP · Apr 26, 2020

COVID-19 jobless rates will be comparable to Great Depression: Trump economic adviser

The U.S. is going to see a jobless rate comparable to what happened during the Great Depression as it recovers from the novel coronavirus pandemic, Kevin Hassett, President Donald Trump's economic adviser, said on ABC's "This Week."

The unemployment rate peaked at about 25% during the Great Depression. And during the Great Recession, it took roughly 10 months for new unemployment claims to go as high as they now have in less than a month.

"Around 2008, we lost 8.7 million jobs and the whole thing. Right now, we're losing that many jobs about every 10 days," he said Sunday. "And so … the economic lift for policymakers is an extraordinary one."

COVID-19 jobless rates will be comparable to Great Depression: Trump economic adviser

ZNP · Apr 26, 2020

'The Food Supply Chain Is Breaking.' Tyson Foods Warns of Meat Shortage as Plants Close Due to COVID-19

Tyson Foods, one of the U.S.’s biggest meat processors, didn’t mince words in a full page New York Times spread that ran Sunday, in which they warned, “the food supply chain is breaking.”

“As pork, beef and chicken plants are being forced to close, even for short periods of time, millions of pounds of meat will disappear from the supply chain,” John Tyson, Chairman of the Board of Tyson Foods, wrote in a letter published as an advertisement. “As a result, there will be limited supply of our products available in grocery stores until we are able to reopen our facilities that are currently closed.”

'The Food Supply Chain Is Breaking.' Tyson Foods Warns of Meat Shortage as Plants Close Due to COVID-19

ZNP · Apr 26, 2020

Coronavirus: A visual guide to the economic impact

Coronavirus: A visual guide to the economic impact

A good collection of graphs.

Let's talk about economic collapse

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