Two facts

1. What happens when the stock exchange shut down / closes as it does in some countries? You can not sell or buy. An important question is. At what price can you sell your stock when the stock exchange opens? In the worst case the company is bankrupt.
2. Some big "short sellers" are those that sold a financial instrument, go broke and never need to cover.
3. The biggest fool buy at the top and sell at the bottom.
4. Is there a theory (in free markets) about when the market bottoms out? Yes, there is one, the Elliott Wave principle / fractal (see my posts for links). It is not about certanty, but about probabilities. There is a most, second most, third most probable pattern / counting.
5. Methods described in Norwegian only: http://www.multifinansit.no/ehandel/nedlastninger.htm
   
   Les: Markedets Bølger and lest Markedets Bølger II (not finished).

Fooball is not immune either. Westham has got problem because of its connection with Icelandic banks.

The is on the wall over Europe.

News some days ago:

"Saudies rules out liquidity problems". Question: Why is the subject in the news?

Cnn Bank Rating. Canadian banks the most secure in the world. Danish and Swedish among the top 5.

Before you invest in a bank. Study the balance sheet in detail. Which assests / posts are "guaranteed" by the government? What percentage is "guaranteed"?

There are some shorters out there sitting silent that should have made a huge amount of money. What is the problem with put options when the market crashes? The institution that issued the put option may be broke when you want to cover.

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I'm definitely going to look more at this theory when I get a chance.

Some stocks are looking 'cheap' right now. Nice example is Microsoft 'MSFT' - the P/E is decreasing with a modest dividence.

Even some companies that are having major operational difficulties are looking 'cheap', excellent example is Ford ('F') which is of course losing money hand over fist, BUT its NET ASSETS exceed MARKET CAPITALIZATION. In theory you could buy the whole company and liquidate it and actually make money (you can't because Bill Ford still holds enough stock in company to prevent you from doing that, plus most of us don't have the $5 billion+ to buy the company), but you get the point.

Personally I don't think the DOW will go below 7500. I think that is where you are going to find your sticking point.

__________________

What's up with October by the way? Why always October?

They should really just consider closing for the whole month!

__________________

Yes in normal times. Wall streets P/E Guru Peter Lynch liked stocks with a P/E around 10 - 15 as far as I remember.

Warren Buffett said: Don't invest in something that you do not understand. I understand Coke and Mc Donald.

Wheter it is the correct time to invest is another story that may require weeks of hard study. Now they are speaking about a long time Bear Market. I have mentioned a secular in this thread.

Can it be something with the human brain (mass psychology?).

Haven't you heard the slogan: Sell in May and Go Away

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The most eksotic is an expanded flat. It has a positive (I don't know how big) probability. Since the 1930 correction was a "zig zag", because of the EWI principle of alternation, a zig zag is ruled out this time.

Image sitting at the top of a big box with a basket ball. You throw the ball in the floor, it tops out above you and ...

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According to the EWI principle the corrective wave at grand supercycle degree say it shall correct down to the eara between the 1929 top and the 1933 bottom. Again, I will not be responsible for this analysis.

You have to buy Robert Prechter's Elliott Wave Theorist and understand the analysis / probabilities, preferred, second preferred, etc. counting.


If you use technical analysis, I call

1. Japanese Candle stick analysis - "The music of the market."
2. The EWI principle / fractal - "The waves of the market."

When a candle stick pattern and an EWI pattern coincide, that is a strong signal. You should have a battery of technical indicators at your disposal.

Benjamin Grahams's value investment analysis is my favourite for a fundamental analysis. In a capitalistic free market economy there are always bargains if you study the stock good enough. The problem is that it is much more difficult to find in bear markets.

A combination of technical and fundamental analysis can be very good. You can get early good / bad signals from a technical analysis. Then study that (those) specific stock(s) in further fundamental detail.

Note: this is a market correction in a free economy and not dooms day and don't blame George Bush. He happened to be your president at this time.

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I received this in an email and though I pass it on.
I do not know who the Aurthur of this is but I'm sure it is not a politician.

> My thoughts on The AIG bailout--more to follow on
> the others......
>
>
> I'm against the $85,000,000,000.00 bailout of AIG.
>
> Instead, I'm in favor of giving $85,000,000,000 to all
> Americans as a
> "Dividend".
>
> To make the math simple, let's assume there are
> 200,000,000 bonafide
> U.S. Citizens 18+
>
> Our population is about 301,000,000 +/- counting every man,
> woman and
> child.
> So 200,000,000 might be a fair stab at adults 18 and up..
>
> So divide 200 million adults 18+ into $85 billion that
> equals to a
> hefty "$425,000.00"
>
> My plan is to give $425,000 to every person 18+ as a
> "Dividend"
> Of course, it would NOT be tax free. So let's assume a
> tax rate of
> 30%.
>
> Every individual 18+ has to pay $127,500.00 in taxes. That
> sends $25.5
> Billion right back to Uncle Sam.
>
> But it means that every adult 18+ has $297,500.00 in their
> pocket.
> A husband and wife have $595,000.00.
>
> What would you do with $297,500.00 to $595,000.00 in your
> family?
> Pay off your mortgage - "housing crisis solved"
> Repay college loans - "a great boost to new
> grads"
> Put away money for college - "it'll be there"
> Save it in a bank - "create money to loan to
> entrepreneurs"
> Buy a new car - "create jobs"
> Invest in the market - "capital drives growth"
> Pay for your parent's medical insurance - "health
> care improves"
>
> Remember this is for every adult U S Citizen 18+ including
> the folks
> who lost their jobs at Lehman Brothers and every other
> company
>
> If we're going to re-distribute wealth let's really
> do it...instead
> of trickling out
>
> If we're going to do an $85 billion bailout, let's
> bail out every
> adult U S Citizen 18+
>
> As for AIG - liquidate it and Sell off its parts.
> Sell off the real estate. Let the private sector bargain
> hunters cut it
> up and clean it up.
>
> Here's my rationale. We deserve it and "AIG
> doesn't" we were not
> invited to the last 10 years of "party time"
> bonuses
>
> And remember, The this plan only really costs $59.5 Billion
> because
> $25.5 Billion is returned instantly in taxes to Uncle Sam.

I like this idea myself.

Except of course that 85 billion divided by 200 million actually equal $425.00 not $425,000.00

__________________

We could just as well adopt the leaf as official tender, that'd pay everything off really quick too.

__________________

It is well known that market volatility is assymmetric. Downturns are much more dramatic than increases. In 2004 I developed my own assymetric percentilebands that can be downloaded in an Exel spreadsheet. I take no responsibility for your use of it.

Other trading bands like Bollinger Bands www.BollingerBands.com: Homepage and Big Trends acelleration bands BigTrends.com: Option Trading, Stock Trading Resources from Price Headley are symmetric.

You can download the file here: Trading page of MultiFinanceIT

If I remember correct, you find all the formulaes in that file.

Market volum is often overlooked. Here Technical Analysis QQQ Trading Nasdaq 100 Stock chart S&P 500 market timing system is a site focusing on market volum.

I don't know how many that has downloaded the file over the years.

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duh.... Reading the email it sounded good.... I never checked the math...

My bad sorry

It is very easy to make mistakes. When I worked in the research department of the Central Bank of Norway, I constantly had to call our Finance Newspaper Dagens Næringsliv that they mixed

Norwegian Trillion 1 000 000 000 000 000 000.

With US trillion 1 000 000 000 000

The last year the US stock market has lost USD 8.3 Trillion.

Where is the market if it looses another 8.3 Trillion?

Norwegian counting:

Million 1 000 000

Milliard: 1 000 000 000

Billion: 1 000 000 000 000

Billiard: 1 000 000 000 000 000

Trillion: 1 000 000 000 000 000 000

Trilliard: 1 000 000 000 000 000 000 000

Central question: How large are the deposists of all central banks ?

In my personal view, one way to not let the above EWI prediction be a fact is to regulate parts of the market like it is now done with the banking system that are taken over by governments (permanently or for a while).

The EW Fractal are based on price fluctuations in free markets. Stock prices in free markets are a measure of mass psychology that has fractal form like so much in nature.

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Germans do a similar thing with the numbers.

It gets hard because all of those pesky zeroes.

Learned a 'rule' in high school. Dividing billions by millions....simply look at the result as a 'batting average' - (move decimal three to the right), this way you don't have to remember how many zeroes there are in a billion or to keep track of how many zeroes you have already typed!

85/200 = .425 (three to the right = 425) nice!

__________________

Personally if we start discussing numbers larger than a trillion, I just refer to it as 'a lot' or a 'gazillion' which is my favorite fictional number!

__________________

It is easy for us to understand Danish, aside from their counting.

Central Banks can start printing money and finance it with seniorage and inflation tax, but that is a very dangerous road to start on.

Without further comparison

Zimbabwe: Inflation Rate Spirals Higher Still

"Zimbabwe’s inflation rate, already one of the highest in world history, rose from an annual rate of 11 million percent in June to 231 million percent in July, according to official statistics reported by the state media".

Related WPW thread: http://www.webproworld.com/breakroom...tml#post386367

It is night in Norway. Don't think too much about this market. There are other values in the world.

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I have too much on my plate and that is my final sign I need to take some time.

I have a few sites that I'm revamping and 2 slated to build. That's my night job.
Day job I have 7 acres of land I'm clearing and a pond to dig to make room for animals.

I think this will be my last past for a while as my mind is melted.
And a few of my posts are showing this.

LOL.....I loved this comment! Good solution!

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Earn Money Online , Forex DayTrading

Or your first future?

There is a site for everythinkg in the US like this

Taxpayers for Common Sense

Citizens Against Government Waste: Homepage

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So much is happening with the USA. In the news:

1. Now cooperating with Libya.
2. India and USA sign nuclear agreement.
3. North Korea taken to Off List of sponsors of terrorism.
4. NATO / Afghanistan suggest to cooperate with Taliban.

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Swedish news yesterday.

Observed food price developements:

1. Price increase are falling.
2. Producer prices may start declining.
3. It will take time before the consumer observes a fall.

Is gold (precious metals) the last "safe" haven?

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That is what is so scary, no matter what you look at there seems to be risk. For the average American, the safest investment that they could make right now is to pay extra against the mortgage. Nice risk-free investment with 5-6% 'return' (it reduced the amount of interest you pay).

You have to be careful of things like gold too, it will retain at least some value, but what goes up can come down (you can't eat it!).

Past week we just saw it here in NJ, gas is now available under $3 per gallon. Of course oil fell by almost 50%, and the price fell from a high of 3.95 to 2.99 (25% (+/-) but still a decrease.

__________________

Have you forgotten my first post

in this thread ?


A combination of

1. Economic slowdown and
2. alternative energy resources

will place a downward press on fossile energy. Prices are determined on the margin.

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Video - Breaking News Videos from CNN.com

Here

CNN.com - Transcripts

is a Fareed Zakaria interview with George Soros on the current crisis.

One of Soros's main points is that USA has overconsumed (another word for saved too little) and China overproduced.

Source: http://www.webproworld.com/breakroom...tml#post359761

The same day Fareed Zakaria had a discussion with one of my favourite US economists Jeffrey Sachs that called Mc Cains ideas absolutely surrealistic. He said that Obama will win the election, since this is the end of the Reagan area.

Related link: http://www.webproworld.com/breakroom...tml#post376378

Note that Sachs meant it was a big error to let Lehman Brothers

"Lehman Brothers, an innovator in global finance, serves the financial needs of corporations, governments and municipalities, institutional clients, and high net worth individuals worldwide. Founded in 1850, Lehman Brothers maintains leadership positions in equity and fixed income sales, trading and research, investment banking, private investment management, asset management and private equity. The Firm is headquartered in New York, with regional headquarters in London and Tokyo, and operates in a network of offices around the world."


go bankrupt. It created the panic that followed the bust. So in a choice of

1. Bailing out a financial institution.
2. Letting it go bust.
3. Government taking control over the institution

there should be no fast solution. Careful analysis is needed. How important is the institution for the stability of the financial system?

It may have been one of the main reasons of the credit freeze and the drying up of the inter-bank market.

"The drying up of this “interbank” lending market has been one of the most worrying aspects of the credit crunch".

Related link:

Systemic risk on the interbank market

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Here's the problem I see here... the demand and the price it is creating is artificial fueled by speculators and "investors". What is driving the price is not the demand for use. ETF's alone have billions of dollars simply vaulted for no other purpose than investing. Anyone who doesn't think that trusts and funds buying bullion and vaulting it, for the sole purpose of selling ETF's based upon the prices they are creating by their purchase of the bullion is sorely mistaken IMO.

Take a look at oil for example. Have we suddenly found giant new reserves of oil that's driven the price down so dramatically? Some magical new alternative energy source that's accounted for what's approaching a 50% drop in the price of crude?

Gold is really no different in that respect. In that ultimately, it's the consumer paying for it because of speculation and not "real" demand. Actually, one could look at it and call it little more than "hoarding".

Dave

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Gold is a totally different proposition Dave. I bet you a penny to a pound that the US still has massive gold reserves (Is Fort Knox still full???) Are the gold mines in Colarado all played out??? - There is gold everywhere, but it's far more difficult to mine. Even Wales has gold reserves. Gold is like a safety net. But Gold is valued in currency, oill is too, but it sells in quantity every minute. Gold has no practical application other than to make articles of value. Oil vanishes, gold is forever.

Anyway, whatever Gordon Brown thought would happen today simply has not occured. I expected a share bounce back today. It started out out well enough, but it's slipping back again.

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http://ctab1.wordpress.com/2009/05/1...ity-mortgages/

Note I wrote safe in quotes.





Source: Historical Gold Charts and Data - London Fix

Site: http://www.kitco.com/

Table: 12/31/1800 - today http://www.finfacts.com/Private/cure...arketprice.htm

Articles:

http://www.marketoracle.co.uk/Article5930.html

http://www.marketoracle.co.uk/Article6762.html

I worked in the Central Bank when the previous precious metal bubble bursted.

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Gold can and is reclaimed. And yes, it's primary use is jewelry however, not at all the only use...

Uses of Gold in Industry, Medicine, Computers, Electronics, Jewelry

Far more applications than one may think.

Considering this, makes my point as I see it. What's the "real" demand and how has that demand changed to justify the price?

Take a look at the chart kgun posted and note the spike in the last 5 years. Gold ETF's began trading in November of 2003. Coincidence? Personally I think not. More info...

Fort Knox holds about 147M ounces. The Federal Reserve holds a whopping 216M ounces. Take a look this...

That's over 22M ounces strictly for gold ETF's. Fort Knox and the Federal Reserve don't sell ETF's.

Dave

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Now, back to the Elliott Wave fractal and an expanded flat that I mentioned in a post above.

1. Now I talk about the stock market and not the credit market.
2. Has the probability of an expanded flat decreased?
3. No, in my opinion after the last record absolute swings it has increased.
4. Fractal structure implies that the price swings you observe intra day may be observed at a lower frequency, monthly, quarterly and yearly.

A more precise explanation of an expanded flat. There are other corrective patterns, but a zig zag is as explained above ruled out.

1. You sit on the top of a box, let it be 14100 (The DJIA in september 2007) with a basket ball.
2. There is a floor in front of you. Further away, there are stairs down to a lower floor (the final bottom of the stock market).
3. You throw the ball in the floor and it jumps above you (14100 on the DJIA).
4. Then it follows a complex trajectory up and down and finally settles at the bottom of the floor below the stairs. The final bottom of the wave of grand super cycle degree is reached.
5. Note there may be many cyclical bull markets in a secular bear market.
6. I may not live when the final bottom is reached.
7. Emperical studies have confirmed that financial time series like stock prices have fractal structure.
8. After the grand supercycle bottom a new expansion starts where I predict that man populate space.

Some interesting articles here: http://www.rgemonitor.com/

Like this

"As Europe’s financial markets spin down into the vortex created by the US credit crisis, we can only be sure of one thing: every new day will contain new surprises. Only a few months ago, the real economy looked solid, with the Euro providing an impressive shield from financial disruption (imagine last year without the ECB!). Now Europe is in negative play, shorted by the markets – possibly betting on a collapse of the EMU. The long shadow of the US crisis will determine almost inexorably the course of Europe’s over the next few weeks. Despite the Euro, Europe is perceived as a vulnerable mosaic of nation-states without any central voice, more likely to play individual strategies without thinking about aggregate outcomes. Yet the fundamentals in Europe appear more solid than in the US. What can Europe do to change this?"

Read more ...

<digression>
Paul Krugman wins Nobel Prize for economics

Academic and columnist Paul Krugman wins Nobel Prize for Economics
</digression>

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And this continues. On yesterdays news:

1. The Central Bank of Iceland have been urged by IMF to raise the interest rate with 6 per cent to 18 per cent. Thy have asked the IMF for a USD 2.1 billion loan and 4 additional billion from other countries.
2. Ukraine have asked the IMF for a USD 16.5 Billion loan.
3. Hungary and Pakistan have also asked for assistance. No amount have been mentioned so far.
4. (Fact: Telenor is providing mobile communications services across 12 countries in Europe and Asia, and Fixed-line and Broadcast services in the Nordic region - Telenor is heavily involved in Ukraine, Pakistan and Hungary. Telenor is not my favourite ISP provider. )
   
   Google: Telenor underleverandør involvert dødsfall
   
   underleverandør = sub contractor
   
   involvert = involved
   
   dødsfall = death
   
   First two hits:
   
   Telenor innrømmer 9 dødsfall ( , Telenor , Børs og finans )Dagens it - Telenor innrømmer elleve dødsfall
   
   inrømmer = admits
   
   This is only what you can expect from the social mood in a bear market correction of Grand Super Cycle degree.
   
   Stated as fact and not to hurt the company. The different stories have been mentioned on our main news station.

Yesterday on our news. A Norwegian company (another "bull / bubble" genious) are investing heavily in gold and reselling. I always urge clients to look at the whole price history of a financial instrument before investing. See the above figure in red. There is nearly always a bigger fool. When your are inside a bubble, it is very difficult to know what is going on and almost impossible to predict the top. Viewing it from the outside / sideline, gives a better picture.

Yesterday was the second largest absolute gain on DJIA. Some of the biggest percentage gains on the DJIA were experienced during the decline from 1929 to 1933. Volatility is seldom a sign of clear direction.

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Looks like Iceland should've joined the euro zone much earlier. If they do so now, they're doing it on terms where the currency has lost half of its value....

__________________

I have always said that that is the worst case scenario for us, that we have to be "saved" by Europe. May be people on Iceland are of the same opinion. Today, Sterling Airways went broke because of the financial problems on Iceland. I think they have a very hard road ahead. But people from Iceland are used to work hard. And they have an enormous energy potential. Look at the second video on my latest site. As far as I know, EU / England has only contributed to their problems. IMF and The Central Bank of Norway have helped them so long and they have asked the Scandinavian countries + Russia for further assistance.


In order of priority, I personally, rely most on:

1. The USA.
2. Russia. (The red army threw out the Nazies and retreated to their own territory. There has always - aside from cold wars imposed upon us by other countries - been a good relation between Russia and Norway). I hope your next president understands Russia better than the Bush administration did. I can tell you. IMO, he did not understand anything. There was a good relation between the West and Russia before he started talking about the rocket shields. I personally understand Russia's fears. I don't hope that we have to join the EU bureaucracy.

Yesterday, Hungary asked the IMF for a 25Bn bailout. This is looking more and more ugly.

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Well, more like saved by the 'euro'. The problem is that their currency represents a relatively small economy vis a vis the rest of the world. If they had been in the 'euro zone' the happenings in Iceland would've exerted downward pressure on the euro, but since Iceland, as a percentage of the entire EU would be relatively small, the euro would've done better than the Krona.

Just taking a quick peek at Iceland's macroeconomic figures:
GDP: $12.19 billion
Imports: $6.18 billion
Exports: $4.793 exports

With a 50% depreciation, Iceland just experienced a massive blow to its 'terms of trade' - It will result in a real decline in purchasing power of the people living there.

I've actually been to Iceland, so I think they will hunker down and get through it. Its going to be a smaller scale version of what recently happened to Argentina.


Yes, they do, lots of geothermal. I saw a program where they want to be the first 'hydrogen' economy or something like that. If the decrease in purchasing power materializes as I fear it will; its good that they have gone this route, quite literally the conditions are in place where Iceland is going to be boosting exports and minimizing imports.

That reeks of a 'pro' American statement.

You write this in the context of the attempt to install a missile defense system in Eastern Europe. This is only one aspect. The US has pursued an expansion of NATO (which ticks Russia off; this was Clinton/Bush); the Yugoslav intervention was viewed as 'anti-Serb' (which also ticked off Russia; this was Clinton); and most importantly Bush took the US out of the ABM Treaty.

The ABM Treaty was made to ensure that neither country would pose a threat to the other's strategic nuclear threat. In essence, it solidified the 'MAD' doctrine (Mutual Assured Destruction; hence no war because it would be ridiculous)

A missile shield is inherently defensive.

The US is not Hitler, Napoleon or Charles XII. The fear is that the US will neutralize their strategic nuclear threat and they will be unable to counter. That fear is unfounded, they simply have too many weapons including ICBMs, medium range nukes, bombers and submarines.

As long as Norway is sitting on all that oil, I don't think you will need to.

I know, the only good news is that October is ending.....

__________________

And not for nothing, but if you understand Russia's fear, I am certain you can empathize with the Poles?

__________________

The problem is that the Icelandic krona fluctuates with how much fish are exported.

And you would have said the same if it were installed on Cuba or in Nicaragua?

There is a significant seasonal effect in the stock market, but now the main problem seems to be the real economy. Historically the stock market leads the real economy. The extreme volatility that the stock market experiences is no sign of a bottom so long. There are also too many bad news to indicate that a bottom has been hammered out.


Yes of course. The Poles are very nice people and a lot of them work and settle here. Poland is historically a country of farmers. Their main problem have been the location between Western Europe (Napoleon, Hitler) and Russia. I once read an article in the Warsaw Business Journal that concluded that a good relation to Russia had historically been good for Poland.

I have seen McCains retoric against Russia. Dangerous in my view. His foreign policy retoric and focus on national security may in the end be synonymous with national and global insecurity and political risk. That and his candidate for vice president is the main reason I hope that he will never be elected. I think his policy will end in more young American and Nato soldiers being brought dead or invalidated back home.

But I am neither so exited (convinced) about Obama. Behind his smile I see a very hard (hopefully not cynical) relatively young man. And he has in my view, an experienced and very competent vice president candidate. I personally preferred Hillary.

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That will stimulate their export and decrease their import. To prevent a too massive capital outflow and stimulate private savings, the IMF gave a loan on the terms that the central bank had to raise the interest rate with 6 per cent to 18 per cent. That blow was hopefully a one time adjustment. But more may come. I think they will work themself out of the crisis.

I have been there too and should like new visits. I think there is great historical, cultural and demographic differences between Iceland and Argentina. The Icelandic economy is fairly transparent and they have a lot of natural resources like fish and energy. Their potential as a net large exporter of energy should not be underestimated. They could export about 100 % of the electricity from their waterfalls e.g, to UK and use geotermal energy at home. Wind-, wave- and saltwater power plants may be of greater importance in the future.

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History demonstrates that it is the US that is a threat to them, not the other way around. I don't anticipate a Cuban invasion of South Florida or a Nicaraguan invasion through Mexico into Texas.

Actually one overlooked aspect of history is filibustering. Check it out on google - interesting story in and of itself.

Filibuster (military - Wikipedia, the free encyclopedia)

William Walker (soldier - Wikipedia, the free encyclopedia)

History is filled with examples of weapon/counter-weapon.

Unfortunately that is the reality, if the US doesn't develop it, somebody else will.

The US military relies heavily on GPS guided weaponry. China launched a missile and shot down an old Chinese satellite; showing that they could do it. Which means they could take out the GPS satellites.

They're already dreaming up ways to get systems into space to defend 'space-based' assets.

To be critical of US/Russia relations is a little difficult inasmuch as history demonstrates that between 1945-2008, I'd say the US has gotten the better of them.

Russia IS a de facto threat. They do possess powerful weapons capable which are, quite literally, as I sit writing this, pointed at me (NJ, NYC metro area).

If they are not a threat, disband NATO.

Under the circumstances I personally would withdraw from NATO for the following reasons:
1. Cold War thinking had the US potentially fighting 2.5 wars: essentially in West Germany and in South Korea (with allied support of course), the 1/2 war would've been against Cuba.
2. On a per capita basis, US military spending is DOUBLE the spending of the next country on the list (UK); if US military spending is reduced, US military committments must also be reduced.
3. During the Cold War; Western Europe and the US vs. Soviet Union and the Warsaw Pact posed a much larger threat to Western Europe than currently exists. Europe has the wherewithal (sufficient technology, finances and size) to check a Russian attack (if anything Europe is MORE powerful than Russia at the moment; 400 million:150 million population (+/-)
4. Trade with the Pacific Rim is much more important to the US than trade with Europe. If you're going to allocate scarce military resources, do so in the areas that are the most vital (Asia, South Korea, Japan, Phillipines, Australia)

__________________

Yes, of course there are differences. And you are correct, with the devaluation, Icelandic products will be 'cheap' and in demand, so we will see a surge in exports and a comemsurate reduction of imports. This actually did happen in Argentina.

I think Iceland still may face some larger problems though.

Argentina GDP: $526.4 billion
Imports $42 billion
Exports $55 billion
TOTAL TRADE AS % OF GDP = 18.42%

Iceland GDP: $12.19 billion
Imports: $6.181 billion
Exports: $4.793 billion
TOTAL TRADE AS % OF GDP = 90.02%

Iceland is obviously a much smaller country (320,000 people), so obviously it makes sense that it is more trade dependent.

What I fear for them is very simple:

Take the example of a simple household. A person goes to work (Exporting labor), and takes the wages and buys things he or she needs (importing goods & services).

If that person receives a 50% pay cut, to maintain the consumption, the exports must increase significantly or the imports must be reduced drastically.

Its a MAJOR, MAJOR change, and of course very sudden.

I see this resulting in an immediate 20% decrease in standard of living

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I will read that later. I am in a hurry now. Shall play chess with my daughters 9 year old son. He is clever. He would probably had problems with most Russian boys at the same age.

Man, be realistic. Why so much silence about Reagans neutronic bomb? And these rocets would fly over many Scandinavian heads. I personally like a stable, strong and posperous Russia. A poor Russia is much more dangerous for Scandinavia. Why not concentrate on trade and not agression? And I know extreme American farmer thinking. A war is good for our economy as long as it is not faught on American soil.




That is why I personally prefer the Swedish Gripen - The wings of your nation - index in stead of your F-35 Lightning II Program . It is

1. Not so agressive.
2. Good for Scandinavian economy in difficult times.

You can call me naive or whatever. I stand by my personal choice.

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I was a kid when Reagan was President. I recall the 'MX' missile debate and 'Star Wars' - Do you mean neutron bomb? (Not sure). The debate was becoming esoteric. The US possessed the ability to destroy the world 20 times over, the Soviet Union possessed the ability to do it perhaps 30 times over. What's the difference? In the end its a smoldering ruin.

That was the essence of 'MAD' that the consequences were so great, it would never happen.

Fly over? Something tells me Scandanavia wouldn't have been on the sidelines of Armageddon.

You say 'be realistic' - yes, nuclear weapons is the proverbial 'Sword of Damocles' not just to the US, but to all of humanity.

Even removing the 'nuclear' out of missiles, missiles are still a major threat CONVENTIONALLY.

Right now they can see them and sometimes they can hit them and they're trying to get better at it. I'm sorry, it seems to be a reasonable endeavor.

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Yes.

In addition, as economists we know that assumptions are essential.

Business as usual.

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Neutron bomb, fission bomb, hydrogen bomb.....From my point of view, there is no difference - gazillions die.

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Yes, and as Keynes once said. In the long run we are all dead

The idea behind Reagans neutron bomb was that it seamlessly fit the capitalistic system. It kill human beings (capital) while keeping real estate (buildings) intact. There is no limit to the creativity of the primate we belong to - homo sapiens.

Back to topic. Yesterday

1. Japan's Prime Minister Taro Aso on Thursday unveiled a USD 277 billion stimulus package for Asia's largest economy to weather the global economic crisis, signalling he would hold off on high-risk elections.
2. Exxon Mobil Corp.'s third-quarter net income rose 58% to a new record of nearly $15 billion, the energy giant said Thursday.

Financial socialism for some and turbo market economy for otheres

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I like that term.

Gas has taken a big tumble here. At the peak here, I paid $3.95 per gallon. I just paid $2.31 per gallon. Note how oil falls by more than 50%, but gas doesn't quite fall 50%!

My mother received a 'lay off' notification. 5 months severance plus state unemployment. She is 59.

This is the second time in her lifetime that she has been laid off by this company. The first time was the early 80s recession. She then was out of the workforce for a while since she gave birth to my brother; then she went back to work for other companies, but went back to them in 1993.....

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Yes, sometimes Mr Market is faster than any government, but his temperament has to be tamed.


In the news:

• Economists: USA is now in recession.
• Societe Generale: Profits down 84 %.
• South Korea unveils 10.8 Bn simulus plan for 2009 according to Cnn.
• EU gives bleak economic outlook for 2009.

This is not turbo market capitalism, but a large poker game where some shorters have made a lot of money and are sitting silently on the side line until Mr. Markets next manic phase.

My definition of Financial Socialism: Socializing losses and privatizing profits (no reshuffling of Joe the Plummer's profit, exept for bailing out Wall Street - Same procedure as last year Miss Sophie).

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Experienced negative GDP growth in the third quarter. If we have two CONSECUTIVE quarters with negative growth, THEN it is a de facto recession. Until then, let us remain optimists; being pessimistic fuels the bear market and becomes a self-fulfilling prophecy!

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De facto, per definition you are correct. Well known lags for economists:

1. Observation.
2. Recognition.
3. Action.

Do you think so many people follow the posts in the WPW breakroom

Headlines on Cnn may be more important.

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We'll call it the 'Obama' feel good recovery. Plus Christmas is coming, I'm seeing 'Now Hiring' signs on many retailers' doors (obviously anecdotal, hardly scientific), although Circuit City is apparently going under.

Gas prices are also down....people like to see that.

I'm calling it right now. There WILL be positive GDP growth for the fourth quarter.

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I think Corporatocracy is the word you are looking for here; I do understand your disdain; I feel it too. "If I make money, good for me, if I lose money, bad for you, still good for me" - I don't think anybody 'likes' the bailout. Its like asking somebody: Do you want a pound of smelly s___ or a pound of really smelly s___?

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No, that is closer to facism to me.

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Fair enough. I get what you're driving at though....

I don't like to use socialism in that context only because you're collectively subsidizing the excesses of capitalism (something most socialists would not desire to subsidize)

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