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Ardennes posted:I am thinking it may be more similar to the 1997 Asian Crisis than an actual 2008-09 or worse scenario. I remember the 1997 Asian Crisis. I remember I got a TV for really cheap. Jeez, China in a booming economy can't do crap for product safety. Imagine what it's going to be like when they start cutting corners.
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Aug 24, 2015 15:19
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freebooter posted:I've always wondered - what happens when Vietnam's wages rise to the point where sweatshops are no longer viable, and then Indonesia's, and then Cambodia's, etc? What happens to the global economy when we no longer have super poor countries to shuck our working class jobs onto? Well, ideally these industries move into a poor and underemployed area and once wages rise to a certain point, that local economy has advanced to the level where they don't need sweatshop labor to survive. The factories move to another poorer country and the prior laborers now enjoy the education and service industries that years of toiling in horrible conditions afforded them. So the answer is Africa. All your clothing is going to be made in Africa. Or China again, depending how bad their economy gets.
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Aug 24, 2015 16:13
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Radbot posted:Yeah I can't possibly understand why people are awaiting another crash after we decided to fix nothing after the last one, wages are lower in real terms than they were in 2008, and showed how vulnerable we (as citizens of the world) are. Just can't see why people are pissed and awaiting some sort of cleansing. As other people have said, there are no apparent ticking time bombs (student loans are an investment!) and overall the U.S. economy is well balanced. Household debt has decreased, savings are up, and corporate America is flushed with cash. Wages have stagnated, but that's slowly increasing now that the labor market is finally tightening. China on the other hand, kind of hosed.
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Aug 24, 2015 21:06
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Radbot posted:So how is $50-250k in nondischargeable debt that slowly sucks at future consumption like a vampire an investment, again? Well, first it's not as bad as people make it out to be (fully half of college graduates have no debt and the average is 20k), second it's already correcting itself as for-profit schools shrink enrollment and college costs stabilize, and third you have a tough time reading sarcasm.
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Aug 24, 2015 23:32
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Grouchio posted:How much further would the Chinese stock markets need to suffer in order to lose the majority of their hold on US markets? Or would that be way too much for the US to handle? The Chinese stock market has no hold on the U.S. market. Except that U.S. companies do business in China and will see fewer sales. I'd be shocked if the Chinese stock market was even a fraction of the size of the U.S. exchanges. The problem right now is no one knows exactly how bad it's going to be in Asia and if there's one thing markets hate it's uncertainty.
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Aug 25, 2015 00:56
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cheesetriangles posted:Don't forget they put your pension into the fire. And almost certainly killed members of your extended family through the Great Cultural Revolution. The fact the Chinese government sucks at investment planning is literally the least evil thing they've done.
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Aug 25, 2015 01:22
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ringu0 posted:Could anyone please do a 101 for me and explain why Dow futures are up? Yesterday there was uncertainty over what China would do and what the U.S. exposure to the meltdown was. Today we are certain China is just going to gently caress things up until there are no more fucks to give, but fortunately we're not as exposed as we thought we were. Also the Fed is probably not going to raise interest rates this year. Also, much of yesterday's drop was panic selling and now those people are poor and can't sell anything else.
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Aug 25, 2015 13:31
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Murgos posted:So, the Chinese model is arrest a bunch of people that the uneducated can easily attribute blame too even though it's obvious that poor government policy led to the event and any individuals behavior is just a scapegoat. The sad part is, you can do very illegal things like launder money for drug cartels and still not get charged for a crime. So it's not just people successfully walking that fine line between illegal and legal. You can literally assist in laundering money for murderous drug kingpins and all you get is a fine. Heck, it wasn't even an American bank so there were no political downsides to prosecuting the gently caress out of that bank. We just apparently really like bankers and hate to see them inconvenienced.
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Aug 26, 2015 16:34
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There are probably British goons in this thread, did the HSBC mess make a lot of news over there? I imagine the Queen's banking regulators were pressuring the U.S. against prosecuting if the ramifications were really that big. Not that they had to push too hard, since we really like bankers in the United States. As for China, it's just a question whether they'll execute the scapegoats in Beijing or send mobile execution vans to their hometowns.
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Aug 26, 2015 17:15
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What I'm hearing is that the Chinese stock market has almost nothing to do with the overall Chinese economy. So all of the underlining issues with their economy (real estate bubble, rapidly aging population, currency manipulation) are still there. It just looks better to the outside world because in other countries the stock market is more closely tied to economic health. In reality it's measurably worse because efforts to fix the fake economy used resources needed by the real economy. It's possible we're overthinking the pension thing, though. Even if the investments lose money, the negative impact can be pushed out decades. The bad side effects will probably be more aggressive investors, who now know Mulan will come save them when they make bad bets. Zohar posted:http://www.smh.com.au/business/the-economy/china-likely-to-drag-the-world-into-global-recession-citigroup-says-20150828-gj9w1g.html Considering Citigroup helped successfully drag the U.S. into a recession, I think we should probably listen to them.
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Aug 28, 2015 14:42
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Vladimir Putin posted:I remember GWB sent legislation to allow Social Security to be invested in Wall Street. This was at the start of his second term and years before the financial crisis. Good thing that idea never came to fruition or all of that money for retirees would have disappeared. Except anything invested back in 2005 would be worth significantly more now, regardless of the 2007 crash. It's not like the small private portion of your overall Social Security benefit was going to be funneled into Chrysler, it'd be indexed on the whole market. Instead it was all spent on budget deficits in the form of Treasury IOU's.
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Aug 29, 2015 02:19
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Arglebargle III posted:The US Treasury Bill -- a notoriously irresponsible investment. It's a terrible investment when it enables Congress to run deficit spending. We have spent five trillion dollars in Social Security surpluses. I think 2009 or 2010 was the first year we didn't borrow against those surpluses only because we didn't have a surplus.
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Aug 29, 2015 02:45
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Arglebargle III posted:And that spending would have yielded greater returns in an index fund? I dunno, what is the ROI for a squadron of f-35's? The point is no one can really say what they spent that five trillion on. Maybe some social programs, perhaps a sub that will someday prove the deciding deterrent in a war. Or more than likely a vote buying scheme. But it's spent now and eventually will have to be repaid with interest. The Bush plan at least put aside a portion of that. Almost like a Social Security lockbox lite. It wasn't a great plan, but it was better than the current system.
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Aug 29, 2015 03:06
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Arglebargle III posted:You have a very simplistic understanding of spending. Have you ever had an economics survey course or a macroeconomics course? Not trying to be mean here, just saying you might want to look up how money moves through an economy. Distributing that money to blue-chip companies through an index fund isn't necessarily a better investment than dropping palettes of cash I have a minor in Economics. Deficit spending is one of those things that economists disagree on, so there's no clear cut correct answer. Using money meant for future retirement payments for today's budget overages is one of those things you can get away with for short stretches of time - like austerity in Europe. Probably not a good idea to do it for decades and to literally use all the surplus. The Bush plan was useful in that it at least saved a small sliver of the Social Security surplus for later. I think I remember back of a napkin calculations that had it saving hundreds of billions of dollars over 20 years. It also would have had a better return than those Treasury IOU's over the last decade even with the Great Recession. And it would have made some Wall Street bankers very rich with commissions - but a rising tide lifts all boats, am I rite?
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Aug 29, 2015 04:03
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Arglebargle III posted:I'm surprised that you have a minor in Economics and yet think "saving" the SS trust fund is a good idea. How do you think treasury bills work? My problem is deficit spending now that'll just result in more deficit spending later when the surplus is no longer there and Social Security payments start becoming a major drag on budgets. I could care less what the SS trust fund is invested in; they could stuff it in Joe Biden's mattress. The problem is using that money in lieu of balancing current budgets. Of course if money gets tight, we can always cut benefits, which is what China will be doing with its pension plans in short order.
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Aug 29, 2015 04:50
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ohgodwhat posted:What would the social security trust fund have been invested in if Congress hadn't engaged in deficit spending? I think it depends on what side of the ledger you're on. Everyone seems to be speaking from the SS Trust Fund side, which says T-bills are pretty good and even if you're only getting 2 to 3 percent return, that's 2 to 3% on 5 trillion dollars. But on the Congressional side, that's money that's been spent, much of it wasted, that will now need to be paid back as Baby Boomers continue to retire. We could have invested it in Pets.com for all the good it'll do to future budgets. I mean, if we had decent inflation we might have a little break in what we owed. But we don't even have that right now.
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Aug 29, 2015 13:16
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Arglebargle III posted:You mean on the discretionary budget side? So they should have put the SS trust fund money into treasury-bills, then taken the cash and just sat on it and ten years later start paying back the T-bills having never used the money? Or is your beef really just that you don't want Congress running deficits and you don't care where the money comes from? What if we'd put the SS money in a "lawck bawcks," do you think Congress would not have mandated deficit spending and the treasury would not have issued bonds to meet the Federal Government's deficit spending obligations? If Al Gore's dream had been realized it would have at least made deficit spending slightly more difficult and perhaps not as opaque. But yeah, I don't like deficits. I voted Ross Perot in my first election if that's any indication of how much I dislike deficits. But back on topic, how about those Chinese?
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Aug 29, 2015 15:45
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Arglebargle III posted:I didn't notice this before. The problem isn't this guy's economics minor, it's that he's an ideologue who buys into the radical reactionary narrative that public spending is equivalent to demagogic vote-buying. I live next door to a trillion dollar vote buying scheme in the F-35 fighter. We get billboards during election season to "SAVE THE F-35!". Absolutely a significant portion of the budget is vote buying for both parties.
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Aug 30, 2015 19:13
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Arglebargle III posted:Elected representatives are held accountable by the electorate for delivering government resources to their area? Schools and hospitals are usually paid for at the local level where there are more restrictions to deficit spending. I really am an one trick pony politically. You can smoke your legal weed while concealing you Glock with a valid weapons permit all the way to the chapel for your same sex marriage and I don't care. Deficit spending, I care about.
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Aug 30, 2015 20:38
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Nintendo Kid posted:Deficit spending is morally and economically justified, sorry that you disagree with reality. These please, enlighten me. Deficit spending is justified at certain times - like during the Great Recession. But that's not what the U.S. government practices. We do deficit spending when the economy is good, we do it when the economy is bad, we do it when T-bills are expensive, we do it when T-bills are cheap. We're like a Doctor Who book of loose fiscal policies. Sure, interest rates are cheap right now, so even I can acknowledge fewer downsides to debt that can be paid back with inflationary dollars. Unless we're spending that money on new programs and policies that represent fixed costs going forward that'll only require more borrowing when debt might not be as cheap (10% T-bills in the 1980's anyone?). I'm an ideologue, but I'm surprisingly open to debate. So far no one's said anything but 'mmmm debt good' and personal attacks. Maybe economic theory has updated since the 1990's, but back then permanent deficits were a bad thing and except for that brief glorious period in the late 90's, that's what we've had. EDIT: and thanks for the new avatar, I was looking for an excuse to replace my old one.
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Aug 30, 2015 22:24
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Crashrat posted:
From a 65 year perspective it looks great, narrow the chart to the last 5 years, eh. http://www.wsj.com/articles/u-s-productivity-increases-at-1-3-pace-in-second-quarter-1439296327 The WSJ posted:The productivity of nonfarm business workers, or the output of goods and services per hour worked, increased at a 1.3% seasonally adjusted annual rate in the second quarter, the Labor Department said Tuesday. That gain followed two consecutive quarterly declines. From a year earlier, productivity was up just 0.3%. So yeah, productivity has been kind of struggling. For awhile now.
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Aug 31, 2015 00:52
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Arglebargle III posted:Sorry, were you going to respond about the US having run deficits forever without ever having the reckoning deficit hawks warn about, or were you just going to trip on to the next scary thing that you'll twist into a reason why the world is scary and we need to balance the budget RIGHT NOW? I don't have a dog in the productivity fight. Someone said 'productivity low' and someone else posted a chart that actually kind of proved that productivity has been meh while simultaneously implying the opposite. I remember hearing multiple stories over the last year about productivity so I was all like, "I got this one!". I mean if you want the deficit hawk opinion - lower productivity requires more workers to produce the same output which could lower unemployment. The more people working, the less dependence on social services and the more payroll taxes collected. When unemployment was at 3% in the late 1990's we had glorious budget surpluses. So...employment good?
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Aug 31, 2015 01:46
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Crashrat posted:The WSJ article you quoted is utter crap, but that's what I'd expect from the WSJ. I was kind of surprised it took that long for someone to say anything from WSJ is crap. Not that it really mattered. Again, someone said productivity was down, you said 'no it's not' and posted a too broad chart showing, yes, productivity has been going up, up, up, except for the last 5 or so years. Which is important because that's what we're referring to when we say productivity is declining and not what the numbers were in 1983. But to contribute to your post - yes, the WSJ takes a simplistic approach with their rationale in that while higher productivity does result in higher wages - that hasn't been happening for awhile. Greedy corporations are partly to blame. However healthcare is also a pretty big reason why the massive productivity gains since 2000 haven't resulted in higher wages. And to source my claim (I didn't quote the WSJ): http://www.pewresearch.org/fact-tank/2014/10/09/for-most-workers-real-wages-have-barely-budged-for-decades/ Specifically... quote:According to BLS-generated cost indexes for wages/salaries and total benefits, benefit costs have risen about 60% since 2001 (when the data series began), versus about 37% for wage and salary costs. (Those indexes do not take inflation into account.) So according to their numbers about half of any wage increases have been eaten up by non-cash benefits, of which employer sponsored healthcare is the greatest component. It's a distant second to deficits, but I do enjoy the economics of healthcare too.
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Aug 31, 2015 14:41
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Killer-of-Lawyers posted:The government buys treasuries from itself all the time, though. Also, it is a tax, but the excess is required to be invested into government bonds. That's the trust fund. Anti debt guy is still an idiot for voting for Perot and probably being a libertarian, but there is a social security trust fund. Hey, I admit I'm not rational in my hatred of deficits and Ross Perot would probably have been a terrible President. My concern on SS is primarily that money taken in now for the program is used to fund other things that may or may not be necessary. When the time comes that payments outstrip revenue (probably around 2020) we'll need to pay that not from the mythical SS Trust Fund, but via the general budget that is already hundreds of billions in the red. Hence more debt - which may not be as cheap to service as it currently is. So yes, it's all money trading hands within the government. But it still represents a very real expense that needs to be paid when the time comes. Or we'll just cut SS benefits by a third - which will happen right around the time most of us Goons retire.
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Aug 31, 2015 15:51
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Fojar38 posted:China has been perpetually "rebalancing and reforming" for like 10 years now and the media keeps swallowing it. It's like every 5 years they have another plan.
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Oct 12, 2015 13:52
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Cultural Imperial posted:Imports down 20.4%, exports down 3.7%. So much for rebalancing that economy. So much for countries like Brazil and Australia. Do iPhones made in China and sold in China count as an import?
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Oct 13, 2015 17:10
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Cultural Imperial posted:http://www.bloomberg.com/news/articles/2015-10-28/china-steel-chief-says-demand-evaporating-at-unprecedented-speed When they say China's steel production will contract by a fifth, like the U.S., Europe, and Japan - are they referring to a recent drop or the historical decline, described rhythmically by the piano stylings of Billy Joel? No, they never taught us what was real, Iron and coke, Chromium Steel 十三五
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Oct 29, 2015 13:30
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Slaan posted:So did they just not see what the One Child Policy would do to the economy, especially for retirees, and not plan around it? Especially when the West was starting to go through the same thing when the policy was implemented, it should have been obvious. They didn't see what the One Child Policy would do for their lopsided male/female ratio either. I seriously doubted they looked too carefully into unintended consequences beyond, "HOLY poo poo WE HAVE A LOT OF PEOPLE!"
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Oct 29, 2015 15:25
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Grouchio posted:Wasn't China like The U.S. stock market recouped much of its losses from 1929 by 1930. Then 1931 and 1932 happened and made 1929 look like a day at the park. So yeah, we're looking at waaay too narrow a sample here to see the eventual trend.
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Nov 6, 2015 16:06
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back in September? I don't think you can so easily rebound from a Black Thursday crash of great proportions.
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LegoPirateNinja posted:Here's a stupid, ignornant question from a clueless goon: Do American investment banks have any exposure to the China markets? Foreign investment is "restricted," but how much US money makes it into China stocks and bonds anyway? Not much. I think I heard earlier China represents 7% of our exports or about 1% of our GDP. Some funds are more exposed than others, just like some companies are. It's probably going to suck for Boeing, Apple, and GM since I think all of them have lots of business in China or were counting on the Chinese to grow their markets. The countries that are boned are places like Brazil that were exporting huge amounts of raw materials to Chinese factories.
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Jan 7, 2016 21:56
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hallebarrysoetoro posted:Next to no real impact, but Canada will take a beating and can cause some actual impact to the US economy. The worst part is this pushes oil prices down even further and makes places like Venezuela and Saudi Arabia more unstable. But otherwise, not much impact. Asia poo poo the bed in the late 90's and the U.S. economy didn't even blink.
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Jan 8, 2016 03:17
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Archimago posted:In GOP debate last night the issue of China imposing tariffs on goods imported from USA was brought up several times and used by some as a justification for imposing a tariff on Chinese goods. Trump being an idiot was proposing a flat tariff. Most tariffs are item specific. I think the US is trying to get a 200% tariff on some Chinese steel because they were unfairly dumping it. We can also limit the amount imported. I read a Reagan book where he discussed shoe import limits with China. Because apparently in the 1980's shoes were still made someplace other than China.
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Jan 20, 2016 01:14
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cheesetriangles posted:Isn't labor in China getting too expensive so all the shoes are made somewhere else now? I don't know if shoes follow the same trends as other clothing/textiles. There might be more involved supply chains that make it difficult to just switch countries like you can with most apparel. For right now almost all shoes are made in China. I can't think of any other product so completely dominated by one country.
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Jan 20, 2016 03:55
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Mange Mite posted:Vietnam is growing these days. For instance, Nike has a plant there and I think like 40+% of their output is from Vietnam now. Compared to like 30% from China. The rest is mostly Indonesia, and then a tiny amount from latin america. I didn't realize Vietnam was taking that much of a bite out of China. I guess it makes sense with the new trade pact and American support for Vietnam and the Philippines against China. All I know is trying to find shoes made somewhere other than China is ridiculously difficult. I've just had to accept that my English shoes are at least made in a country once dominated by England. Murgos posted:For pretty much all of recorded history China has had an enormous population, only rarely has their economy been really outstanding. Then again, a big country can be poor and still have a huge market. The middle class in India is bigger than all of the United States. So these emerging markets have an outsized influence. It's like GM keeping the Buick nameplate not because it's popular in the United States, but because the Chinese like it. I can't wait to see the shitstorm when GM tries to sell Chinese-made Buicks in the United States.
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Jan 20, 2016 14:54
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Smilin Joe Fission posted:Not to derail too much, but I've always found it hilarious that Buick out of all the GM nameplates is the one that really took off in China. Apparently the public image of Buick is the exact opposite of what it means to a lot of Americans nowadays. Rather than being seen as essentially a car for the 70+ age group that likes GM but can't afford a Cadillac, it's seen as this cool edgy brand favored by the new rich, business/tech elites, and of course ordinary people who want to project that image. Buick is marginally improving their image. My wife drives one, but it's still kind of an old person car. It reminds me if I leave my blinker on. Mange Mite posted:Dunno, a lot of decent shoes are still made outside China, too. Spain is popular, and there's a lot of English shoemakers who still make stuff in England - Charles Tyrwhitt, Herring, Loake 1880, etc. In the US Allen Edmonds is still around. If anything, it's actually hard to find a decent good quality shoe that is made in China. Pay enough and you'll get artisanal footwear hand crafted by a blind master cobbler with leather so soft it's like you crossed a cow with a puffy white cloud. I just wish there was a middle ground. $50 shoes? Definitely made in a sweatshop. $150 shoes? Still made in a sweatshop. $300 shoes? Maybe not made in a sweatshop. I have heard that there's a massive difference in quality when you get up to the $300 range. I'm not sure if I like my shoe styles enough to want them to last a lifetime though.
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Jan 21, 2016 02:36
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Artificer posted:Have standards here gone up, or are things still the same in the Chinese car industry? I suppose it's probably the same. 3 trillion and not a bit of inflation. There was a podcast, Planet Money I think, that talked about inflation in the 1970's and how bringing money creation to a stretching halt did absolutely nothing to curb inflation. A huge component of inflation is people's expectation of rising prices/wages and not actual extra money. So we add 3 trillion and nothing bad happens, because unemployment was high and people thought the economy was worse than it was. Plus no one's gotten raises for the last decade so increased wages weren't putting pressure on prices. Surprisingly enough QE is considered one of the reasons we have 3% growth and Europe is still around 1%. The European Central Bank is now looking at using QE to try and stimulate their economies.
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Jan 22, 2016 01:54
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There was a statistic from the Economist that it'd only take 5% of Chinese to convert their Yuan to the max of $50k in Dollars to completely exhaust China's currency reserves. I have no idea if 5% of Chinese have or feel a need to exchange their Yuan for $50k in Dollars. But it'd be kind of funny if it becomes easier to turn Butcoins into USD than Yuan.
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Jan 26, 2016 14:55
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What kind of market crash would the U.S. see if the head of the BEA was arrested shortly after releasing highly suspect GDP information?
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Jan 26, 2016 15:50
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Fojar38 posted:Honestly the fact that the Chinese announce their yearly growth rate the first week of January should have been raising red flags for years. Wait...they're announcing 2016 GDP? I thought those were 2015 results. 
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Jan 27, 2016 16:00
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icantfindaname posted:Foreign exchange reserves are used to manipulate a country's exchange rate / currency value. So them running out of dollar reserves basically would mean they have no control over the valuation of the yuan anymore. I'm not sure how big a problem that would be, though China keeps their Yuan artificially low. So if they can't control it, I guess it might rise in value making their exports more expensive. But that won't be a problem after they print 10 trillion more of them.
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Feb 12, 2016 00:40
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