The Next Big Crash - Are You Prepared?

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(01-10-2013, 07:49 AM)NTL Wrote:
(30-09-2013, 02:58 PM)BlueKelah Wrote: USA is shutting down. Politicians bickering like those in Greece. Greece had germany to take care of them, who will take care of the USA?

Kicking the can down the road is not sustainable.

Gamen shutdown happened on Bill Clinton's watch, it can happen again. Anyone still remember 1997 financial crisis, it was preceded by US gamen shutdown in 1996...

Only thing is information flows much faster now, markets react so much quicker.

We shall find out tonight what happened.

AFAIK

Can anyone enlighten me what is this US shutdown? Trying to read on Yahoo, but the bits and pieces make little sense to me.

Thanks.

The politicians are unable to agree on the Budget. If it can't clear Congress, then no money is available for the different government agencies to spend. So, have to shut down in the worst case scenario.... But, so far, the politicians will be able to strike a last minute deal...Rolleyes
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looks like the last minute deal is not gonna happen this time.

Basically US government has hit the debt ceiling which according to their laws is a maximum debt amount which the country is allowed to borrow at any one time. now already in the trillions. so in order to borrow more money to pay the public worker salary, obama (democrat) has to get the whole "parliament" to agree to raise the debt limit.

As the republicans (the other major political party) are opposed to Obamacare (obama's medicare which ensures all have insurance cover, even the poor) they are using this debt limit raising to make some trouble.

On the good side, this will actually force the US to have spending cuts.

On the bad side this could trigger another financial crisis.

as I said before, constant QE and stimulus is not the solution. wait till you see the bloodbath in europe.

AH CRASH LAI LIAO... possibly
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Probably this time is a little different. Obama already said upfront to the world, to say "NO" to ransom.
White house has also clarify he had no power to act alone. This seems to put the "Ball" back at Republican Court. But is harder for them to back down now without any takeaways.

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the way i see it, very possible shutdown, followed by a swift response of stimulus right after.

So wait for shutdown, market correct maybe 20% and buy into some value shares when you see them wanting to announce another round of stimulus...
Virtual currencies are worth virtually nothing.
http://thebluefund.blogspot.com
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Republicans are going out on a limb to stop people from getting healthcare..

I hope that the government shuts down to show the American people just who are they really voting for.

And kudos for the Democrats this time for standing their ground.
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Paul Krugman's view on the issue...

What a US government default could mean

This may be the way the world ends — not with a bang but with a temper tantrum.

Okay, a temporary government shutdown in the United States — which became almost inevitable after Sunday’s House vote to provide government funding only on unacceptable conditions — wouldn’t be the end of the world.

But a US government default, which will happen unless Congress raises the debt ceiling soon, might cause financial catastrophe. Unfortunately, many Republicans either don’t understand this or don’t care.

Let’s talk first about the economics.

After the government shutdowns of 1995 and 1996, many observers concluded that such events, while clearly bad, aren’t catastrophes: Essential services continue and the result is a major nuisance but no lasting harm. That’s still partly true, but it’s important to note that the Clinton-era shutdowns took place against the background of a booming economy.

Today, we have a weak economy, with falling government spending one main cause of that weakness. A shutdown would amount to a further economic hit, which could become a big deal if it went on for a long time.

Still, a government shutdown looks benign compared with the possibility that Congress might refuse to raise the debt ceiling.

First of all, hitting the ceiling would force a huge, immediate spending cut, almost surely pushing America back into recession.

Beyond that, failure to raise the ceiling would mean missed payments on existing US government debt. And that might have terrifying consequences.

Why? Financial markets have long treated US bonds as the ultimate safe asset; the assumption that America will always honour its debts is the bedrock on which the world financial system rests.

In particular, Treasury bills — short-term US bonds — are what investors demand when they want absolutely solid collateral against loans. Treasury bills are so essential for this role that in times of severe stress they sometimes pay slightly negative interest rates, that is, they’re treated as being better than cash.

Now, suppose it became clear that US bonds weren’t safe, that America couldn’t be counted on to honour its debts after all. Suddenly, the whole system would be disrupted.

Maybe, if we were lucky, financial institutions would quickly cobble together alternative arrangements. But it looks quite possible that default would create a huge financial crisis, dwarfing the crisis set off by the failure of Lehman Brothers five years ago.

No sane political system would run this kind of risk.

But we don’t have a sane political system; we have a system in which a substantial number of Republicans believe that they can force President Barack Obama to cancel health reform by threatening a government shutdown, a debt default, or both — and in which Republican leaders who know better are afraid to level with the party’s delusional wing.

Reasonable people know that Mr Obama can’t and won’t let himself be blackmailed in this way, and not just because health reform is his key policy legacy. After all, once he starts making concessions to people who threaten to blow up the world economy unless they get what they want, he might as well tear up the constitution.

ABOUT THE AUTHOR:

Paul Krugman is Professor of Economics and International Affairs at the Woodrow Wilson School of Public and International Affairs at Princeton University. This is abridged from a longer commentary.
http://www.todayonline.com/world/america...could-mean
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(01-10-2013, 09:16 AM)Wildreamz Wrote: Republicans are going out on a limb to stop people from getting healthcare..

I hope that the government shuts down to show the American people just who are they really voting for.

And kudos for the Democrats this time for standing their ground.

I can't believe that there are still people supporting some of Obama's populist ideas.

It is exactly those ideas that put US government in such a position.

Cut entitlement, please. US government can have surplus without a sweat and US will have a better economic future.
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what a roller coaster ride this is Big Grin

I expect a solution to be carved out at last minute again once both sides are done playing politics and scoring points.

Not having a cooperative working relationship with the republicans also reflects on obama weak position which going to haunt him later whatever the outcome.
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American politics is so exciting......*cough dysfunctional cough*

(01-10-2013, 07:49 AM)NTL Wrote:
(30-09-2013, 02:58 PM)BlueKelah Wrote: USA is shutting down. Politicians bickering like those in Greece. Greece had germany to take care of them, who will take care of the USA?

Kicking the can down the road is not sustainable.

Gamen shutdown happened on Bill Clinton's watch, it can happen again. Anyone still remember 1997 financial crisis, it was preceded by US gamen shutdown in 1996...

Only thing is information flows much faster now, markets react so much quicker.

We shall find out tonight what happened.

Can anyone enlighten me what is this US shutdown? Trying to read on Yahoo, but the bits and pieces make little sense to me.

Thanks.

Basically, it is 2011 all over again.

This debt ceiling fight has become an annual event. Angel
My Dividend Investing Blog
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Hi Freedom,

Do you think that the healthcare law introduced by Obama is a "Freeloader" populist idea?

Also, would like to understand from you which ideas from Obama made U.S. into the current state?

Also what do you mean in the "Current State".

Appreciate your views on this.


I can't believe that there are still people supporting some of Obama's populist ideas.

It is exactly those ideas that put US government in such a position.

Cut entitlement, please. US government can have surplus without a sweat and US will have a better economic future.
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