This page has been archived and commenting is disabled.
Charting The Great World Trade Collapse
A new report by VoxEU provides some detailed perspectives on just how bad the collapse in world trade has been as a result of the last year's events. In a nutshell: the current Great Recession/Depression has plunged the world into an unprecedented collapse of global trade, with the resultant blowing of liquidity bubbles having been the only way for individual governments to respond to this massive loss of GDP. And while drops in world trade are nothing new, with a 5% drop in the 1982 and 2001 periods, as well as a more severe 11% contraction in the 1970s, the current plunge of over 15% YoY is truly unprecedented and demonstrates the fragile nature of "globalization." What the outcome of this fact will be, depends entirely on the traditional dynamo of world economic growth - the US consumer, and unfortunately he is still down for the count.
From the VoxEU report:
Global trade has dropped before ? three times since WWII ? but this is by far the largest. As Figure 1 shows, global trade fell for at least three quarters during three of the worldwide recessions that have occurred since 1965 ? the oil-shock recession of 1974-75, the inflation-defeating recession of 1982-83, and the Tech-Wreck recession of 2001-02. Specifically:
- The 1982 and 2001 drops were comparatively mild, with growth from the previous year’s quarter reaching -5% at the most.
- The 1970s event was twice that size, with growth stumbling to -11%.
- Today's collapse is much worse; for two quarters in a row, world trade flows have been 15% below their previous year levels.
On the steepness of the current collapse:
The great trade collapse is not as large as that of the Great Depression, but it is much steeper. It took 24 months in the Great Depression for world trade to fall as far as it fell in the 9 months from November 2008.
On the synchronicity of the collapse, which is most troubling, as while the benefits of globalization have been widely extolled previously, this is one of the most troubling adverse side-effects:
- All 104 nations on which the WTO reports data experienced a drop in both imports and exports during the second half of 2008 and the first half of 2009.
- ?Figure 3 shows how imports and exports collapsed for the EU27 and 10 other nations that together account for three-quarters of world trade; each of these trade flows dropped by more than 20% from 2008Q2 to 2009Q2; many fell 30%
or more.- ?World trade in almost every product category was positive in 2008Q2, almost all were negative in 2008Q4 and all where negative in 2009Q1 (Figure 4).
On the causes of the "Great Trade Collapse":
The great trade collapse was triggered by ? and helped spread ? the global economic slump that has come to be called "The Great Recession."
As the left panel of Figure 7 shows, the OECD nations slipped into recession in this period, with the largest importing markets ? the US, EU and Japan (the G3) ? seeing their GDP growth plummet more or less in synch. The US and Europe saw negative GDP growth rates of 3 to 4%; Japan was hit far worse.
Another very relevant topic: why have GDPs not followed the trade collapse to the same degree:
Given the global recession, a drop in global trade is unsurprising. The question is: Why so big? The chapter by Caroline Freund shows that during the four large, postwar recessions (1975, 1982, 1991, and 2001) world trade dropped 4.8 times more than GDP (also see Freund 2009).
This time the drop was far, far larger. From an historical perspective (Figure 8), the drop is astonishing. The figure shows the trade-to-GDP ratio rising steeply in the late 1990s before stagnating in the new century right up to the great trade collapse in 2008.
The rise in the 1990s is explained by a number of factors including trade liberalisation. A key driver, however, was the establishment of international supply chains (manufacturing was geographically unbundled with various slices of the value-added process being placed in nearby nations). This unbundling meant that the same valueadded crossed borders several times. In a simple international supply chain, imported parts would be transformed into exported components which were in turn assembled into final goods and exported again, so the trade figures counted the final value added several times.
As we shall see, the presences of these highly integrated and tightly synchronised production networks plays an important role in the nature of the great trade collapse.
As for the implications of the collapse:
What does the great trade collapse mean for the world economy? The authors of this Ebook present a remarkable consensus on this. Three points are repeatedly stressed:
- Global trade imbalances are a problem that needs to be tackled.
One group of authors (see the chapters by Fred Bergsten, by Anne Krueger, and by Jeff Frieden) sees them as one the root causes of the Subprime crisis. They worry that allowing them to continue is setting up the world for another global economic crisis. Fred Bergsten in particular argues that the US must get its federal budget deficit in order to avoid laying the carpet for the next crisis.
Another group points to the combination of Asian trade surpluses and persistent high unemployment in the US and Europe as a source of protectionist pressures (see the chapters by Caroline Freund, by Simon Evenett, and by Richard Baldwin and Daria Taglioni). The chapter by O’Rourke notes that avoiding a protectionist backlash will require that i) the slump ends soon, and ii) severe exchange rate misalignments at a time of rising unemployment are avoided.
- Governments should guard against compliancy in their vigil against protectionism.
Most authors mention the point that while new protectionism to date has had a modest trade effect, things need not stay that way. The chapter by Simon Evenett is particularly clear on this point.
There is much work to be done before economists fully understand the great trade collapse, but the chapters in this Ebook constitute a first draft of the consensus that will undoubtedly emerge from the pages of scientific journals in two or three years time.
One simple way to look at the globalized chain of events is that even as trade has collapsed, CBs have turned on the liquidity spigot, and the resulting rush to risky assets has moderated to a large extent a collapse in GDP which would have certainly resulted in a global depression of unprecedented proportions. It is early to say if this consequence has so far been avoided. Yet with excess liquidity being a presumably transient phenomenon, the traditional driver of economic growth, end user consumption and purchasing, has to resume. Alas, as Obama himself has pointed out, the US consumer will be out for the count for an indefinite period, and without that critical cog in the global economy, all other measures are merely band aid temporary solutions. The major debate in the economic community right now is whether the temporary fixes will be sufficient to get the consumer out of hiding. Yet with wage deflation and unemployment still surging, the likelihood of a favorable outcome grows dimmer by the month. And with systemic shocks like Dubai threatening to destabilize the fragile state of the world economy as we saw so vividly last week, a global economy priced to perfection may be just taking the policy of "hope" one step too far.
Full VoxEU report together with relevant essays.
»
- 41888 reads
- Printer-friendly version
- Send to friend
- advertisements -
oh, for the good old days...
http://www.theonion.com/content/node/31049
THE "GREAT DEPRESSION" WAS MERELY A DRESS REHEARSAL FOR THE FINANCIAL CALAMITY THAT IS BEARING DOWN ON U.S. READY OR NOT.........
THE FOLLOWING EXCERPT IS FROM BOB CHAPMAN'S...THE INTERNATIONAL FORECASTER
BOB HAS SOME CONNECTIONS ON "THE INSIDE"
http://theinternationalforecaster.com/
FULL ARTICLE 11-28-09
The following information may be the most important we have ever published. One of our Intel sources, highly placed in banking circles, tells us that on 1/1/10 all banks that have received TARP funds have been informed by the Federal Reserve that they must further restrict any commercial lending. Loans have to be 75% collateralized, 50% of which has to be in cash, which is a compensating balance.
The Fed has to do one of two things: They either have to pull $1.5 trillion out of the system by June, which would collapse the economy, or face hyperinflation. This is why the Fed has instructed banks to inform them when and how much of the TARP funds they can return. At best they can expect $300 to $400 billion plus the $200 billion the Fed already has in hand.
I used to think Mr. Chapman was just a crazy old man. But then I noticed that his predictions are accurate more often than not. And his crystal ball often comes with a clock, which is rare in the prognostication biz. He desperately needs an editor, but the content is dynamite.
Steve Quayle dot com #1'd this page for today.
The neo-Mercantilists blew up their only export market.
Blew it up, yes, but it was a steaming pile of creaking wreckage for a while.
The US ability to create and then absorb "imports" and boost globalization was a product of two important and lethal trends;
1) We quit maunfacturing things ourselves and sent the factories (and those jobs) overseas;
2) Former factory workers then took out consumer loans and turned their homes into ATM machines so everyone could then buy the stuff from overseas we no longer produced ourselves.
Neither of those realities was sustainable. And, we cannot easily return to either practice, and certainly not both. No fucking way under the sun is that experiment going forward.
The whole thing was a huge 30 year circle-jerk of greed in US industry and financials. And a major rip-off of the middle-class. People bought into this fantasy on the promise of leasure, entertainment and easy riches via Ponzi schemes and real estate flipping. Lies, fraud and propaganda. What a crock.
Well it's over now, friends. Blown to ratshit. The only thing holding this game together is the thin thread of QE fisted off on the US taxpayer and suffering middle-class as "heroic effort to save the economy". And what did we think we would be "recovering" to? Debt and off-shoring? Are we really that stupid? QE didn't bring back our exported jobs and it didn't erase our debt. We. Are. Toast. It won't even have saved the big banks. Waste of money and worse -- far worse -- a waste of TIME.
When we go down on the next leg, I fear there will be no bottom until every god-damn thing done in 30 years is un-done and erased. Until the debt evaporates in total debt destruction and the jobs come back as local industry and production because the infrastructure and credit required for moving crap all over the planet implodes.
cougar
Well said Couger.
"no bottom until every god-damn thing done in 30 years is un-done and erased. Until the debt evaporates in total debt destruction" -- well said indeed...much as I hate to say it because of the pain involved...but...bring it on already! Time to reset and start over.
People will not change, until they are made to feel the pain.
Pain equals change.
My friend, as fatalist as you sound I cannot for the life of me find any way to refute you. We. Are. Toast.
This reality however is a nugget that only a minority of the population understands and it begs a much larger and more prescient question. Now that we understand the reality, how do we protect ourselves and/or benefit?
I was and still am of the opinion that under we default on the debt we have piled up, we cannot move forward. This means crushing deflation and possibly a restructuring of many establishments like the Fed, Medicare, Social Security, FDIC, etc. But of course many people on this board are also correct in pointing out that the easiest way out of this problem is to print.
Ergo, still confused.
"Possibly a restructuring"? Are you serious? The list of vital institutions you listed -- without which the USofA would be nearly ungovernable -- are doomed to evaporate out of hand. There is no money behind SS and there is no taxbase to reinflate it. End of story there. Medicare is on the precipice of wholesale collapse once the armies of retirees and unemployed sink their hooks into it. The FDIC is a bankrupt conduit of cash into the pockets of bank management who are looting their own instutitions into insolvency and paying out huge end-game bonuses.
The house is a raging inferno of ineptitude, fraud and privateering. Nobody is raising an alarm. Everybody is playing out end-game strategies. The future is discounted to zero against present liabilities. We're all hoping for literal miracles, literally money to fall from the sky or for the massive imbalances to magically right themselves.
I'm not fatalistic as much as I am losing hope -- have lost hope -- and having lost it makes me inclined to see this for what it is. Because when it's over you really need to move on, and to move on you need to let go.
I am what "letting go" sounds like. It sounds ugly even to me.
cougar
Yes, I am serious. I mean possibly restructuring because a straight up default will result in head on stakes ala French Revolution. Something will act as a transition, I just have no idea what.
I am well aware of the bankrupt nature of these programs, FDIC scam, etc. I mentioned them for a reason not because I think they are financially sound.
That being said, the argument is still about inflation/deflation. Is it not?
Think in terms of the letter "G"...
-Grub
-Guns
-Garden
-Gold/Silver
-Guard Dog(s)
-Go John Galt
Let it implode...Get through the pain/dictatorship/"Mad Max" times...then we can rebuild and be real capitalists again.
That's my plan and 2 cents (1913) or 43 cents (2009).
It's the only way. DaBoyz will never give up the merry-go-round without a brutal, broken-jaw fight in the mud. They've got plenty of jackboots that don't want to lose a paycheck, and frankly, they like what they do.
Working on the guns, garden is tough in my climate and wondering about the cash.
MOst everyone here says Gold, but how is that going to save us? We cannot use it as legal tender, so what is the plan? Sell it for FRNs? I am trying to make sense of hoarding the precious metal and I cannot come up with a reason. What is stopping another confiscation like FDR pulled off 33?
Hot climate or cold? if cold, from Harbor Freight you can get a greenhouse for $500-800 (http://www.harborfreight.com/cpi/ctaf/displayitem.taf?Itemnumber=93920), get some black rocks, used motor oil in jugs to retain heat and grow cool weather crops. If hot, use trench techniques.
As far as why gold and silver, there are more intelligent people on ZH than I to expound upon the virtues of PMs, and FRN's wont be usable for anything but toilet paper if/when we get to this point. I like "junk silver" (1964 and earlier US coins) for future casual day-to-day transactions, and gold and silver bullion coins from the mints ARE legal tender, btw. :)
I am in the burbs of Boston, so nice and cold. I have a very small backyard - live in a townhouse. Still that is a pretty cool solution, I will look into that!
How does the coinage work from the mint? I thought they only regarded it as the face denomination value. So for isntance a $5 gold eagle cannot be used to pay $120 dollars worth of taxes even though that is how much a $5 is worth now. Am I wrong here?
The worst part is the premium on these blasted things. It's a good 10-20%. A $5 eagle is about 120$ dollars worth of gold at today's prices, yet buying it for less than $160 is impossible.
Does anyone here own gold eagles?
Lots of food you can grow! This book lives next to my reading chair: Four Season Harvest http://www.amazon.com/gp/product/1890132276/ref=ox_ya_oh_product
Do you stockpile on seeds?
Can you tell me more about the junk silver? We talking Morgan dollars, stuff like that?
quarters, dimes, half dollars, dollars 1964 and earlier are .90 silver...
I try to do heirloom plants so I can harvest viable seeds successfully. Also, here is a reputable supplier of good seeds:
http://everlastingseeds.com/
Four Square Gardening completely changed my perspective as well. If you can stay in one place it will serve you very, very well. It overcomes all of the soil problems people encounter. It's brilliant.
What gunz are you considering?
Guns are just tools (at least here in fly-over country), think about what they are used for and speculate on what you might be needing...handgun to make sure you can get to the long guns for food that runs (or for the long distance call if two-legged nasties)...shotguns for small food, food that flies (or two-legged nasties that require a local call).
Only you know you needs, potential needs, temperment, etc. :)
Agreed, agreed. What calibers are you considering? You truly want to know what's up with precious metals?
I am going through the stupid paperwork, it takes months to get this crap done.
I am getting a glock and hopefully an unrestricted class A and a remmington shotgun for the house. I need the pistol grip Remmington because of shoulder problems.
Yes, of course I want to know. I am well aware of their hedging ability, but I am entirely unsure of how exactly they will be used. We can't eat it, drink it, use it to pay our debts, what good is it? If the FRN collapses, then we revert to barter anyway.
Oh, mixed up replies. Sorry guys. This is a good start:
Jim Rawles runs the survivalist equivalent of ZH:
And for firearms in a collapse scenario:
I wouldn't be qualified to expound much further - only personal experiences. This will possibly be just confirming a lot of what you might already know. The main advantage precious metals is that it can be exchanged for almost anything. Not everyone will want your diversified stash of basic-needs items like tampons, #10 cans of food, fuel, common caliber ammunition, etc. And not everyone will want your shiny coins! The trick, of course, is to know the needs of the person you're bartering with more than they know about yours. And you can carry the coins a lot more easily than buckets of wheat if you have to flee for your life and leave your other supplies behind.
Common sense explanation, I will check it out - thanks bud!
... or local currencies.
handguns 9mm for wife and kids, .45 or .357mag for me
long guns 30.06, .308, .22
shotguns 12 gauge, 20 gauge
On PMs, I have basic understanding, and have been interested in them since the dot.com bust, my mind is always open to more information...:) Let's say I may have purchased a coin or two here and there over the years...;)
Great. I might suggest all 9mm, same weapon as wifey so you have ammo and spare parts redundancy. Some people have a machoman thing for .45 but if you can aim the 9 it's just as good for spoiling plans - it's better to hit more, and have more, (and magazine redundancy, too), and practice/stockpile more. Consider a .38 special, or subcompact 9mm, for deeper concealment. .357 has a lot of power, but you just can't really hide its glory very well - not to mention rate of fire without magazines. Post-collapse, or not even during a full collapse, you will never want people to know you're armed - opportunists will find a way...especially if you're walking down the street with a slung rifle. I only suggest a .38 because of its compactness and 100% reliability when fired under cloth.
Go with an M1A - you can hunt, pierce engine blocks, and say 'hi' from 800 yards with it. Again, ammo redundancy. I also have a .30-06 scoped bolt-action, but I'm mostly holding onto it to loosely follow the 'one is none, and two is one' rule that tends to apply when you least expect it.
If your only choice was one gun make it a pistol. I'd have two pistols before a rifle. This I apply generally for urban-dwellers - which is a pretty bad place to be in a collapse anyway. you would want to look just as destitute as every other poor bastard out there - with the (hidden) ability to protect yourself at all costs - and you can't take your rifle everywhere as stated above. If you have a stocked up cabin in the woods than I'd have rifles before pistols - plenty of space and it's unlikely you'll be standing in a breadline with crack addicts or even people that just haven't had their antidepressant-candy because there is none.
.22 and shotguns - shotguns are great and all but it starts to become a lot of different equipment to carry around. If you're hunting small game why waste a shotgun shell on it when you can carry around cheaper, lighter .22 ammo? Big game you've got your hunting rifle. I say skip a shotgun. It's a first choice for many - what a mistake - how many shells you gonna carry around? Stockpile it? That's a lot of space/weight just to have a cannon like that. But that would be a good reason to have some buckshot/birdshot in your inventory for bartering - what they will need.
Couple 9's, a Ruger 10/22, and an M1A - you're freaking set for all occasions viewing them as tools.
In My Humble Opinion.
A lot of what I have already is my hunting gear, Browning 30.06 for deer, elk, etc., 12 gauge for goose/duck, etc. 10/22 for plinking and teaching the kids. 9mm is fine so far, just was hard to get ammo for a while.
I like 30.06 a lot (hey, it won WWII...), didnt have problems getting ammo at all the last year or so.
I live in the burbs, but very close to real wilderness (within 45 minutes) and have backpacked extensively in several areas so I can get out of the way fairly quickly, should it get that bad here. I am hopeful that here in fly-over country, once the 2-legged nasties figure out that there be better and easier pickings on the coast, and we can get on with things.
Love the aught six! Yep, it's all about a good community if it gets ugly. I get 9mm from Cabela's.com all the time - at least for killing paper. Check out the Sellier and Bellot.
Hot lead is a precious metal also...just saying.
When paper is ZERO..Take it from there arkady
Well if it is a deflationary environment after all, cashwill be King
Good booze
Good Booze
Gallons and Gallons of Good Booze
I like Glenlivet.... Booze
Right on, tomdub_1024. Thanks for your 43.67 cents.
This is larger than a financial engineering problem. It's an overpopulation problem. The human population is at the top end of an exponential growth curve which will either collapse or plateau. We are a colony of ants feasting on a rotten log, busily chewing and spitting out sawdust, which is characterized as economic growth, but in the harsh cold reality of life, we as a species are eating ourselves out of a home and it will all come crumbling down somewhere down the line.
No one can say with any certainty how this will play out. War. Disease. Famine. All of the above. One thing I know for certain. Our growth is unsustainable. It cannot continue unabated. How does one prepare for an event that has never occured on this scale before? Like Cougar I have started the process of letting go. I think short term and local. I'm developing an appetite for homesteading and the pleasures and hardships of self reliance. Beyond that, I'm not so sure there is much more that can be done. I'm mentally preparing for a long, gruelling marathon without any quick financial fix so when the hard times hit, the depression and panic won't be as acute. The world isn't going to end but it will look very different from what has preceded us.
Friendly Northern Bear, up there,
You and me both.
Your right Winisk, the underlying problem is overpopulation, and it's a bitch.
You are right the American worker has been forced to substitute debt for income. Meanwhile the cost of living has out strip the workers ability to pay for the basics, like housing and health care.
One of the best bits of expression I have read for a while
So your note was cut copied plagerized and pasted into my "quotes of wisdom" document.
Mittal is shuttering steal plants in the US. What does this mean for our national security?
Hmmm... Hundreds of very angry steelworkers?
... wielding pitchforks made in Korea?
Fuck, this is getting bad,,, I said a long time ago, take care of your own, the Titanic is at a 45 degree angle and most Americans are still at the bar watching football, Ya can't save everybody...
Pitchforks that have the tines come off easy...the handles come loose..
That would be the biggest irony of the revolution, all our outsourced tools don't even last beyond the first, uh, pitching.
indeed....(note to self, stock up on welding gear, possible future business opportunity...:)
Cougar suggested:
"wielding pitchforks made in Korea?"
which you propose will lead to:
"welding pitch forks made in Korea."
Is this a sustainable business model? I think it might be if the wielding and welding both go well.
:-)
might be sustainable...should I build in shoddy welding so they have to come back for repairs on the repairs (you know, like certain govt owned car companies)? lol...wish I could do that...unfortunately I am an arrogant, perfectionistic bastard sorta person, so I would do it right and they wouldnt have to come back for repairs on the repairs...
But, if enough wielding, I can make it up in volume for awhile...:)
You hit it out of the park. But I did send you an easy pitch. Er... fork
No question you lobbed me an easy one.
I have always liked your "pitch. Er" (permission to groan).
Is that a Maine coon?
I have a Siamese Tabby mix in my lap as I type.
Yeah, and their opening one up in Liberia...at Lamco's old Mt Nimba Mine, go figure.
DBA "ArcelorMittal"
Here's a few videos of the old Lamco Mine in Liberia, the "richest iron deposit on the planet" (Mt. Nimba).
http://www.youtube.com/watch?v=OM-7xj76Q60&feature=related
http://www.youtube.com/watch?v=5XGU9_Mg3QM&feature=relate
http://www.youtube.com/watch?v=h0yzEHdNSCA&feature=related
http://www.youtube.com/watch?v=ySOb-u3CzcQ&feature=related
I'm planning a trip to Liberia for next June, this will be the first place I go!
DBA "ArcelorMittal" Liberia
You ain't seen nothing yet, just wait until the tarriffs start hitting. I expect sometime next spring leading up to the election, as the unemployment situation worsens and the public really starts calling for Chinese blood.
Global trade can kiss my ass.
OT
A continuation of the wars on Shadows and Things is the wrong way to go. You cannot win a war against Terror. Terrorism is a tactic it has no consciousness it cannot be aware that it won or lost, same with the war on drugs. Perhaps BO can come up with some different shadows and things to wage wars against to distinguish himself from Bush and Reagan and bankrupt our country even faster than them.
It's called the War on Health Insurance.
'War on Terror' - I can't even believe average Americans bought this for so long. Fighting a grease fire with a spatula.
Actually, it's more like fighting a kitchen fire with a glacier.
.miltype
Actually, it's more like fighting a kitchen fire with a glacier.
.miltype
The war on climate change was supposed to be that shadow. It remains to be seen whether a couple Russian hackers bring down that whole house of cards. So far the MSM is doing a great job of ignoring the truth.
It's going to engulf them....Fuck the MSM. Penn state is now investigating this fraud....
So then what would you have done on 9/12/2001?
Riyadh & Mecca would still be glowing in the dark.
Not that they had anything to do with it.
Babylon is fallen, is fallen....
everyday on here I read one negative thing after the other, and I do think they are all true. Yet, stocks only seem to go higher, despite all the crummy fundamentals and the divergent technicals. I think we are witnessing something historic, but I honestly don't know what to make of it anymore.
Irrational markets should not surprise anyone... its happened throughout history time and time again. Read Extraordinary Popular Delusions And The Madness of Crowds by Charles Mackay to give you some historical perspective.
Good explanation
http://www.chrismartenson.com/blog/pumps-full/32142?utm_source=feedburne...
You should think of equities markets as one gigantic feat of propaganda.
That would be bad enough. But in order to construct their propagandist world the powers that be had to steal wealth from the future, and by over-reaching may have accidentally blown up the country and part of the global economy. We seem to be in a slow motion train wreck of titanic proportions, and nobody is sure how these things resolve themselves. And thus everyone with a functioning brain is scared shitless right now.
History will not be kind on the clowns who pulled this off.
cougar
It ain't mom and pop driving it. It's daBoyz.
Forget equities, they are garbage now. Not only has volume vanished suggesting the participation is narrow, but there is very credible evidence to suggest that the bailed out banks are injecting funds into the stock market because they cannot lend it out anymore. That combined with the Dollar carry trade is fueling this pathetic shell of what used to be the US Stock Market.
Are you kidding me? They are totally related. You haven't been paying attention.
The USD is being intentionally destroyed, which drives up the "price" (in USD) or a lot of things.
This all started in 2000/2001, with a brief interruption last year. Plot the S&P vs Gold since 2000, it becomes more obvious.
You just can't see it as well because your frame of reference is the USD. Change your frame of reference and it becomes more clear.
Babylon is falling down
Everybody losing control
People use and abuse this world
And now they just taking a stroll
These times have changed
Time will tell, left in no wealth
You gotta start giving your love
Maybe then you will open your eyes
And end up in Heaven above
There is light at the end of the darkness
Why don’t you come out and see? Yeah
Some are prisoners of this world, Lord
But you were never right to be, these times
Babylon is falling, falling, falling, falling down.
- Slightly Stoopid
Tyler, great. Thanks for snaggin' this. It is 248 pg and it appears to be meat not sizzle.
Also, manufacturing jobs have been falling in America since 1955. There have been slower declines. And, not to be too cheeky, but these United State have not been that friendly to jobs for a long time. No suprise that they went away. Also, like it or not we have slowly become a service econ. not one making buggy whips. What is at issue is the bearing of most management, BOD and people/workers in general. No/very little pride in production despite what the ads say. If the series the office is even a bit so, well you see what I mean!
From today's Front Running,
Competitive devaluations threaten a trade war -FT
Although few analysts believe the euro to be undervalued against the dollar – indeed, most believe it is more likely to be overvalued – it is nonetheless forced to bear the brunt of US dollar adjustment by further appreciation. This means that both the US and eurozone countries suffer from currency intervention and competitive devaluations elsewhere, with little room to adjust. Once again it seems we are going to make the same mistake. Countries that can expand their share of global demand by competitive devaluations are seeking to do so.
http://www.ft.com/cms/s/0/24b5c0c6-dead-11de-adff-00144feab49a.html
Sounds a lot like a card game we used to play.
http://boardgames.about.com/od/cardgames/a/beggar_my_nghbr.htm
We called it "fuck your buddy"
How about a 20% tariff on imported goods into the US? We damn sure tax what we produce here while our trade partners waive the VAT's on exports. The US has no business encouraging more debt. In any case, the trade war would be over. This might be intentionally shooting ones toes off, but it beats having a leg amputated.
For all the hand-wringing about "tarriffs contributed to the GD", the people back then were no less intelligent than they are now - they HAD to institute tarriffs, just like we need to now.
Read the FT piece TD linked on the morning news, it describes it well. When the global economic pie is shrinking, to survive you need to grab a bigger piece of the pie. One way is to devalue your currency, hence the currency wars between US and Japan, for example. Where that won't work (ie. China), tarriffs are needed.
I agree, an immediate 20% (or higher, 50% might be more appropriate) tarriff on goods of Chinese origin is necessary to save the US economy, despite what the free trade globalization fear mongers tell you.
Wow...that would make shopping at WalMart a tad less appealing, no?
How can this be? China's gubmint said their exports increased 30% last quarter:)
Tyler/Marla/whoever is at the wheel,
Have you seen the Gallup report on their analysis of consumer spending for the Black Friday week being down 25% y/o/y (hat tip to Karl Denniger)? Curious for others thoughts on the report.
Thanks for the tip, link,
http://www.gallup.com/poll/124508/Gallup-Economic-Weekly-Thanksgiving-We...
Your very welcome. Any thoughts? Any body? If even 10% lower, it's MAJOR.
Yeah, I'm with Davidowitz , Consumer Is A Disaster, Gallup confirms it,
http://www.businessinsider.com/recovery-are-you-kidding-me-us-consumer-i...
-5% or -25%, Get ready for the CRE disaster to follow.
You get to the end of the pier and you realize the lake you walked out on was runoff from a feedlot and all there is there is more bullcrap. The question rises, why was trade off so far? Well, why is unemployment so high when you look at U-6? Why are government revenues down double digits? It could be that the economy has shrunk more than they are letting on.
Next is the insinuation that the subprime crisis was caused by this. No, the subprime crisis was caused by FNMA, FRE, GS, MS, BS, C, JPM, WFC, BAC, etc along with the creators of marketable toxic waste S&P, Moody's, etc, Greenspan providing a carry trade in money and the US Federal government pushing credit. The US economy was destroyed by the US banks and Wall Street, flooding the country with credit and sucking equity out of American homes to capitalize cheap goods production across the Pacific. Americans go to school to learn how to do something so they can create credit that flows across the sea so some guy in India can take the job they just took student loan out to train for. Protection or not, depression or not, the US is going to cease to exist if the status quo continues.
The banks and Wall Street may have committed the slam dunk, but the government is the one that said "There's the goal, and here's your alley-oop."
The government stood by while our post-war industrial base was exported to Asia to fatten the purse of management (and increase campaign contributions), and then they went into a panic when someone pointed out that shortly nobody in America would have a job more complicated than dog walker. Easy credit, easy monetary policies, downward ratchet on regulations, and institutionalized Ponzi schemes kept the wheels from falling off for 30 years.
Well, the wheels have fallen off in the end anyway. Who'd a thunk it?
Now all they can think to do is lie about how bad things are. Okay, that will buy them about 6 more months until everyone realizes they are being lied to, at which point the governement's leadership credibility will evaporate. Forever. Leaving us with no money, no jobs, no services, no backstop, no hope, no faith, no justice and no effective government for 300 million people armed to the teeth. Whoo boy it's going to get mighty interesting!
The vise is closing on the necks of these greedy parasites and they can feel it. And -- they've got nowhere to hide.
cougar
The government did more than just 'stand by'. Perhaps there was some superficial partial de-regulation over the past 30 years, but there was still plenty of business-unfriendly taxation and regulation to drive manufacturing out of the country, not the least of which was minimum wage laws and perhaps a little labor lobby corruption.
But we can blame the Chinese for that, so it's all good.
Not that there's not plenty of that "we're too good for manufacturing" attitude in our culture. Just that, I think if you're laying a narrative on the inevitability of our situation, it ought to include all the parameters outlining our history, not just the greedy bankers. Without a government that crossed the line it shouldn't have crossed, in setting up the Federal Reserve (and all those dominoes), the inherent greed of the financial industry would have been kept more in check by natural market risk.
No argument from me on your points. It was a circus if idiots for a long time. And the American consumer can be blamed for drinking the kool-aid against their better sense.
You seem to think a minimum wage is a bad thing. You don't think that a more equitable distribution of profits across social strata (including labor) is a healthy and modifying influence on all parties? If so then I'd say your pinstripes are showing. Keep in mind, if we end up in a class struggle like the French experienced there will be a lot more wealth burned than created. Redistribution of wealth can include redistribution into graveyards and ashes, just as it can between strata of people within functioning societies. We don't always have a chance to choose, but if we don't choose then the default method of correcting the imbalance still applies.
cougar
Sounds like a divorce. Better to choose your poison than have a judge choose it for you or in this case an angry desperate mob.
I agree, Henry Ford paid his workers enough so that they could afford his product, haven't heard much about his love of socialism, and he did manage a profit and made a couple bucks... Profit and usable wages are NOT mutally exclusive...and if the working and middle classes are content enough (food, shelter, car or two, a vacation every now and then, a chance to better themselves if so inclined), then you have stability. It seems as though some people think the middle and working classes are in the way now...just sayin'...
I am so greatful for these kinds of reports, Baltic Dry Index, because with all the spin, this is where you find the truth. I can show some people these things and they get it.
Thanks.
Agree, this is one of the sites I come to for the truth, and despite some people's complaints that it is a "bear site" and that reading it "cost them money", too fucking bad, they just misread the tea leaves.
Any fools reading this site since the spring, with all the evidence presented that TPTB were going to kill the USD in order to create another bubble, and shorted equities despite that, deserved to lose their money.
But it is not too late - get the hell out of the USD while you still can.
The United States needs less world trade. We need to make more at home and provide more of our own energy via coal, gas and nuclear. This recession has brought down our trade deficits but still..... We need to be in balance or with a trade surplus
Energy imports are a large part of our trade deficits
You're right but are you willing to accept a 90% pay cut? How about hyper-inflationary prices? That's the cost of globalization that we're are too entrenched in. The US will only start producing and consuming it's own products when one of these scenarios play out. Until then, the slave trade resumes.....after this hiccup of course.
A world trade report and no mention of Baltic Dry Index. Not one reference? Interesting.
Take a look for yourself and ask, is the BDI really a leading indicator for equities (S and P 500)?
http://www.census.gov/foreign-trade/Press-Release/current_press_release/ft900.pdf
http://www.wikinvest.com/index/Baltic_Dry_Index_-_BDI_(BALDRY)
http://www.google.com/finance?q=INDEXSP:.INX
http://www.polb.com/economics/stats/tonnage.asp
Other trade stuff:
So how is the US economy doing? Well what aspect? How about US trade and intermodal freight:
Well we will just look at GDP numbers right. You hear this a lot. GDP this, GDP that, GDP ratio to something else, and what do you really learn after all this GDP talk about the US economy, not a lot. Other than GDP is not all that useful to investors. Well what is? .......
So, tucked away towards the back of G___ S___ NYC research department is Bob (not his real name). He wears thick glasses, likes Anchovies on his Pizza, and burps a lot. Bob likes the GDP number because it provides much amusement. So he does his do diligence, and reads the entire report, preferably during potty breaks.
Bob is fun, especially his reports. Ah yes, but to really understand the economy in a GDPish type way, you must look what comes in, what goes out, and how things move around the country. Intermodal is where its at, he smirks.
If you had real-time access to all of the goods moving around the country (Intermodal), export sourcing and originating from imports, you would know exactly how the "functioning" economy is doing. So what do you look at?
For far east trade you can look at the West Coast ports.
Thanks Bob.
I provided a link to Long Beach.
Anyway thats the basic premise for understanding the trade "mechanisms" in the US.
Trade deficit:
Also, I provided a link to the trade deficit report. What is interesting to me is to try and understand the influence of Cash for Clunkers on the trade deficit. What I mean is, that this is a good test case to find out the real impact of globalization on the US. Or to put it another way, our true dependence on trade.
Is America noncompetitive? or just a victim of our politicians inaction in addressing trade?
Mark Beck
Yep, it's all coming out in the wash now.
When the people become aware that both the folks in DC and the folks on WS are nothing more than Necrotrophic Parasites (parasites that kill their host) then some very drastic and painful changes will follow.
It's no accident that the transnational "global financial elite" is pushing the idea that the BRIC countries are the "coming thing". Having all but killed off this host, they will need four new victims to take the place of the USA.
Memo to Messrs: Da Silva, Singh, Mevedev, Putin, and Hu Jintao:
If you see The Squid and the others coming toward you bearing low-interest loans and "hot" investment capital, run as fast as you can in the other direction.
Otherwise, the fate of Japan and the US awaits you.
KptLt. laughing swordfish
9er Unterseeboote Flotille
Absolutely great interview of Sir James Goldsmith - 1994 regarding globalism and the impact it would (this was from 1994!) have on the western societies. Even mentions derivative back in 1994 when the World GNP was 30 Trillion and that the nightly settlement of derivative contracts equaled that even back then.
A lengthy watch but well worth it.
Sir James Goldsmith - 1994
http://video.google.com/videoplay?docid=5064665078176641728&ei=OTYPS9zaDIGKqAP0mYDgDQ&q=sir+james+goldsmith+charlie+rose&hl=en&client=firefox-a#
1994??
Many of us began fighting against globalization (i.e., corporatization) back in 1978!
And that was well before Jackoff-what's-his-face, CEO at GE, began offshoring all their engineering, tech and production jobs back in 1985!
Although I do applaud Goldsmith's mention of derivatives, which the Group of Thirty began pushing back in 1993.
And, with respect to the early '90s, you may have heard that Geithner's chief of staff, Michael Patterson was a lobbyist for Goldman Sachs?
But that was after he was working for JPMorgan back in the early '90s, where he not only testified before congress about repealing Glass-Steagall, but he was involved in JPMorgan's wonderful report entitled, "Glass-Steagall: Overdue for Repeal"......
cougar, faustian, mann11 agreed.
however, I am not optimistic that joe6pack will join the dots. we muricans are purty fuckin dumbed down these days. check out "dumb americans" on youtube. everyone thinks that australia is iran because the producers taped the word "iran" on that country on a map. see it to believe it. they think fidel castro is a dance or drink... kofi annan a coffee etc etc. USA = lobotomized nation! it would be funny if it wasnt so pitiful. i knew an american doc who couldnt find scandinavia on a wall map for 5 minutes... had to show him where sweden is. cannot make this up.
reasons for collapse multidimensional. corporate offshoring but workforce now rendered utterly dysfunctional.
no, watch for a coming distraction.... ayrabs probably attack us "again." smell of napalm in the morning etc. asymmetric non-financial event. then the fucker goes into freefall. spent time in malaysia/singapore recently. made me realize just how badly USA human capital has fallen. dumbed down, undisciplined, childish, media-fetish, incurious, dumb as shit.
she aint comin' back... ever! celente is dead right.... USA = mexico, NYC = mexico city... give it a year or two.
parabellum
Probably GDP as a measure of growth is wrong ..
What you can purchase for 1USD may be a good measure .. say in the last year you got 1 bushel of wheat for 1USD and you are able to get 1.1 bushel of wheat for 1USD probbaly you are better off .. just a computer ... same price better product ..
That is why all this talk about tariffs makes no sense. Unless trade increases, we all suffer. Where the focus should be is on growing the economy, rather than figuring out what country or company to slap new tariffs on.
admin
http://inverics.com
Are you for real??? Trade??? All Military Units should be pulled back to within a 200 hundred mile defensive perimeter around North America, you can eat your junk your shipping over here.
admin
http://fuckyou.com
not.
I would like to commend just about all of you people on this board for the great bounty of wisdom and knowledge thou hast spread out before me.In my opinion the best info comes from the comments section and you people are hittin nail after nail dead on the head,and doing it without getting critical of each other or getting sidetracked on the religious bickering bandwagon that infests most boards.
hopefully in the future i can come to the table on another topic that hasn't been so well dissected.
One simple way to look at the globalized chain of events is that even as trade has collapsed, CBs have turned on the liquidity spigot, and the resulting rush to risky assets has moderated to a large extent a collapse in GDP which would have certainly resulted in a global depression of unprecedented proportions.accounting degree | engineering degree | business administration degree | business management degree | computer science degree