“Perfect Storm” May Clobber Global Economy

[Xue Sheng]

“Perfect Storm” May Clobber Global Economy

NYU Professor Nouriel Roubini has seized the headlines again this morning, warning that a "perfect storm" of economic disasters may smash the global economy in 2013.

Roubini's perfect storm consists of four factors:

-The U.S.'s basket-case of an economy and budget deficit,
-A potential slowdown in China,
-European debt restructuring and
-Stagnation in Japan.

Roubini says there's a one-in-three chance that these factors will clobber growth in 2013.

Now, that sounds terrifying, but it all means there's a two-in-three chance that everything will be okay. (Roubini's other two possible scenarios are "anemic growth" and "accelerating growth.")

One problem that seems undeniable is the European debt crisis, which has defied all attempts to paper it over and kick the can down the road. Greece is broke, and no serious analyst that I know of thinks it will ever be able to pay back its debts. The logic underlying the endless bailouts and aid-packages, therefore, is to deal with the problem later and/or hope that it somehow resolves itself. In an FT editorial today Professor Roubini said that this hope was a hallucination and that the Euro-zone needs to break apart.

"There are already elements of fragility," Bloomberg quotes Roubini as saying. "Everybody's kicking the can down the road of too much public and private debt. The can is becoming heavier and heavier, and bigger on debt, and all these problems may come to a head by 2013 at the latest

So what do you think?

 

[Scott T]

Sounds fine to me. Apparently we learn nothing from those depressions-that-aren't-called-depressions. We need another event like that of the 30's. Maybe have a few more stockbrokers jump out 30th floor windows.

 

[Archangel M]

[yt]aUyh2yaZPno[/yt]

 

[granfire]

I think we already had the perfect storm, still digging out from under it.


Also, that brings one question I had back to the fore front:

Are damages by natural disasters damages or stimulus?

 

[RandomPhantom700]

[yt]aUyh2yaZPno[/yt]

Is Chicken Little leaning back against another stuffed animal or am I actually seeing two extra appendages on him?

 

[seasoned]

Is Chicken Little leaning back against another stuffed animal or am I actually seeing two extra appendages on him?

There's more then meets the eye here, you know, something like the "economy".

 

[Xue Sheng]

I’m not worried about this since the truth is I can do nothing about it either way but just think for a second….what if he is right and labeling him Chicken little is just not facing reality in our newish Global Economy…. What then?

Let’s not forget...the Titanic was unsinkable

 

[Xue Sheng]

Sounds fine to me. Apparently we learn nothing from those depressions-that-aren't-called-depressions. We need another event like that of the 30's. Maybe have a few more stockbrokers jump out 30th floor windows.

I mean no offense but... and I could be wrong but it sounds like you do not really know the extent of the great depression. School systems closed, large swaths of the American population were homeless and/or unemployed just to talk about a few of the issues.

I was rather amazed at what was going on during the great depression when I started reading about it.

And you know what, there are an awful lot of similarities between the start of the great depression and what is going on in the USA now right down to bailing out banks. But then there are a lot of differences to as it applies to our economic model and the one they had just before the Great Depression

 

[MA-Caver]

I saw this article as well. And well... my thoughts on it... Let it all fall down and then we start over smarter and better than we did before. If we learn from the mistakes then we have a slim chance of doing it again...



yeah... rriiiggghhht.

 

[Xue Sheng]

I think we already had the perfect storm, still digging out from under it.


Also, that brings one question I had back to the fore front:

Are damages by natural disasters damages or stimulus?

I tend to believe a natural Disaster is a disaster, hence the word disaster in the name.

However could it be stimulus? There are studies done under the title of Disaster management that suggest that possibly they can be a type stimulus but that is based on the unity that a natural disaster can bring about within a population. A population that was once disjointed finds itself working together but this tends not to last much beyond the initial recovery period

 

[granfire]

I tend to believe a natural Disaster is a disaster, hence the word disaster in the name.

However could it be stimulus? There are studies done under the title of Disaster management that suggest that possibly they can be a type stimulus but that is based on the unity that a natural disaster can bring about within a population. A population that was once disjointed finds itself working together but this tends not to last much beyond the initial recovery period

I was really thinking in terms of $$ only, not so much of the human kind:

The stuff lost will have to be replaced and rebuild.

It was a thought that struck me...

 

[Nomad]

I tend to believe a natural Disaster is a disaster, hence the word disaster in the name.

However could it be stimulus? There are studies done under the title of Disaster management that suggest that possibly they can be a type stimulus but that is based on the unity that a natural disaster can bring about within a population. A population that was once disjointed finds itself working together but this tends not to last much beyond the initial recovery period

Agreed. Especially when the international help that often follows a huge natural disaster trickles away and the area is still a disaster. Ask folks in New Orleans or Haiti or Japan how that stimulus is going... I'm sure loads of them are way better off than before...

 

[Xue Sheng]

I was really thinking in terms of $$ only, not so much of the human kind:

The stuff lost will have to be replaced and rebuild.

It was a thought that struck me...

IMO, from a financial disaster POV

If you look at it as a reset button or a return to the beginning kind of thing then maybe but then that would mean a completely different economic view and possibly a different base, meaning less credit more cash and it is also likely that there would be a drop in the standard of living for most however that standard may be more secure...

 

[granfire]

IMO, from a financial disaster POV

If you look at it as a reset button or a return to the beginning kind of thing then maybe but then that would mean a completely different economic view and possibly a different base, meaning less credit more cash and it is also likely that there would be a drop in the standard of living for most however that standard may be more secure...

True.

But then again, look at all the initial purchase power driven by volunteers and good Samaritans.
Then followed by massive demands on the economy to replace housing.

Much of what is lost will take years and decades to replace, that's for sure, as it was not accumulated at once anyhow.
But I am pretty certain car dealerships had a pretty successful Spring season around here...the insurance companies will probably go with 'Damage' all the way though...

 

[Scott T]

I mean no offense but... and I could be wrong but it sounds like you do not really know the extent of the great depression. School systems closed, large swaths of the American population were homeless and/or unemployed just to talk about a few of the issues.

I was rather amazed at what was going on during the great depression when I started reading about it.

And you know what, there are an awful lot of similarities between the start of the great depression and what is going on in the USA now right down to bailing out banks. But then there are a lot of differences to as it applies to our economic model and the one they had just before the Great Depression

Though I havie a passing familiarity with the shantytowns set uop by the homeless in the US, I'm more familiar with it from the Canadian experience. I have done my own reading up on it, and as bad as it was, a recurrance today may help reverse a lot of economic retardation that's been going on the last 50 years.

 

[Sukerkin]

Well we need to change something, that's for sure.

At present we (or rather the global cartel of governments) are trying to bind everything up with twine so that we can go on with the same old shell-game.

In the parlance of our Trans-Atlantic friends, that dog dont hunt. Never did. It's just taken the better part of a century (thanks to lots of wars) for the debt-laying chickens to come home to roost.

The system fails on a number of basic counts but most boil down to the unit of exchange not being related to the value of goods and services in the economy. This in turn is exacerbated by the majority of the money being used in millisecond roulette games rather than being used to do actual economic 'work'.

'Wealth' is an entirely different thing than 'money'. The former is the actual worth of resources (of all kinds) whilst the latter is a way of 'keeping score'. When the two become divorced then you have a problem ...

The biggest problem of all, however, is that those with the power to change things have a vested interest in keeping them the same as they are doing very well out of it, thank you very much; and couldn't care less that despite all our advances, the 'typical' working man is worse off (or at best no better off) than he was decades ago. Plus, the national infrastructures are collapsing as there is no 'profit' in maintaining or improving them.

It's a recipe for disaster that is only going to get worse because of the globalisation of labour that the big business pundits encouraged because it raised their short term balances ... utterly ignoring that every country needs to retain the fundamental manufacturing capabilites if it is to retain it's independance and some semblance of fiscal security.

 

[Xue Sheng]

Well we need to change something, that's for sure.

At present we (or rather the global cartel of governments) are trying to bind everything up with twine so that we can go on with the same old shell-game.

In the parlance of our Trans-Atlantic friends, that dog dont hunt. Never did. It's just taken the better part of a century (thanks to lots of wars) for the debt-laying chickens to come home to roost.

The system fails on a number of basic counts but most boil down to the unit of exchange not being related to the value of goods and services in the economy. This in turn is exacerbated by the majority of the money being used in millisecond roulette games rather than being used to do actual economic 'work'.

'Wealth' is an entirely different thing than 'money'. The former is the actual worth of resources (of all kinds) whilst the latter is a way of 'keeping score'. When the two become divorced then you have a problem ...

The biggest problem of all, however, is that those with the power to change things have a vested interest in keeping them the same as they are doing very well out of it, thank you very much; and couldn't care less that despite all our advances, the 'typical' working man is worse off (or at best no better off) than he was decades ago. Plus, the national infrastructures are collapsing as there is no 'profit' in maintaining or improving them.

It's a recipe for disaster that is only going to get worse because of the globalisation of labour that the big business pundits encouraged because it raised their short term balances ... utterly ignoring that every country needs to retain the fundamental manufacturing capabilites if it is to retain it's independance and some semblance of fiscal security.

Wait a minute... I thought you lived in England…. Are you sure you don’t live in the USA because that sounds pretty much like what is going on here in the USA

 

[granfire]

IMO, from a financial disaster POV

If you look at it as a reset button or a return to the beginning kind of thing then maybe but then that would mean a completely different economic view and possibly a different base, meaning less credit more cash and it is also likely that there would be a drop in the standard of living for most however that standard may be more secure...

Interestingly enough the local news had something on yesterday or so: while the momentary losses are huge, they expect a turnaround to the tune of about 4 times of the damages once the dust settles...

naturally it seems a bit cynical to cheer such things on in light of over 300 people dead from the tornadoes alone! (or is that 400, with Joplin and Mass now to add?)

 

[Xue Sheng]

Interestingly enough the local news had something on yesterday or so: while the momentary losses are huge, they expect a turnaround to the tune of about 4 times of the damages once the dust settles...

naturally it seems a bit cynical to cheer such things on in light of over 300 people dead from the tornadoes alone! (or is that 400, with Joplin and Mass now to add?)

But I was not talking about a natural disaster in that post, I was talking about a financial disaster and they are not the same one is fairly unavoidable while the other one is avoidable.

And you don't cheer either of them...you survive them

 

[granfire]

But I was not talking about a natural disaster in that post, I was talking about a financial disaster and they are not the same one is fairly unavoidable while the other one is avoidable.

And you don't cheer either of them...you survive them

well, financial disasters tend to make people sit on what little money they have.
Seems wise from the individual's POV, but it puts less money into circulation.

natural disasters leave an immediate need for repairs and replacement in their wake.
You HAVE to spend the money on the home repairs and car replacement...

(see where I am going with this?)

I don't think I would have gone down this road in my line of thinking if not every 2nd word or excuse these days was 'The Economy'

I forgot the numbers, but Alabama is expecting to see several billion in economic upswing, due to the storm damage...