hey, drifitin' with Citi so low, do you think this would be a good time to buy or should I just wait it out....?
my gf works for Citi and I've been watching the stock fall fall and fall some more...I've been wanting to jump in, but have been fearful...
I don't see Citi failing...but then again, who knows...
I wouldn't touch it.
Period.
Citibank may not "fail",
but if the waters get any rougher (certainly seems like it)
they sure as hell may end up as nothing more than a part of JP Morgan Chase or some such.
As for all this counterargument about deflation
1. Sure deflation can be "good" for resetting the system, but the key in your quote (dmitry) was this:
It dampens the growth of the welfare state, if it does not lead to its outright implosion.
Thats one HELL of a gamble!
:(
2.
SPONGER -- I think you have some valid arguments as for what CAN cause deflationary spirals, but your analysis is so limited in scope that you fail to recognize OTHER valid mechanisms by which the deflationary spiral can be both triggered and exacerbated.
I'm not going to pick apart the whole post, because i don't feel it is my duty ... besides, you have some awfully strange connections in there -- somehow bringing 20 year olds staying at home in to the mainstream of the argument? -- but anyhow ...
When you say deflationary spirals are caused by employers stuck paying, and who "can no longer pay" inflated salaries to employees ... SURE that is accurate ... but fuck the line "inflated" salaries ... we don't need the qualifier ...
HOW ABOUT: EMPLOYERS CAN NO LONGER PAY EMPLOYEES, PERIOD.
THIS circumstance would be ENOUGH, BY ITSELF to at least start a round of demand-deflation-producing layoffs.
And THAT is WHERE WE ARE AT.
As liquidity and lending grind ever closer to a halt, large businesses are becoming STRAPPED FOR CASH TO MEET EVEN BASIC FUNCTIONS LIKE PAYROLL AND DISTRIBUTION. As THAT happens, you will watch the lay-offs continue to INCREASE.
Hell, THE FOMC ITSELF has this as a MAJOR concern going forward.
"generally expected the economy to contract moderately in the second half of 2008 and the first half of 2009, and agreed that the downside risks to growth had increased,"
AND
The FOMC now projects the unemployment rate will average between 6.3% and 6.5% at the end of this year and will average between 7.1% and 7.5% next year. Three months earlier, the FOMC had expected unemployment to remain below 6% throughout the period.
So.
Deteriorating economy in to and THROUGH 2009 ...
and INCREASING UNEMPLOYMENT through next year as well.
AND, THE FED MINUTES ALWAYS SEEM TO LAG THE REALITY OF THE DETERIORATION -- meaning that they say 7.1% to 7.5% next year, but by January, that number could be looking more like 8.5% to 9.5% ...
:(
The only other relevant portion of your post that i will counter is that of the houses being a special asset class that is more resistant to deflation due to its utility ... THIS IS OUTRIGHT FALSE.
Housing is tied significantly TO EMPLOYMENT ... and as employment deteriorates, you will see housing markets across the country further deteriorate in a regionalized fashion ...
ALSO, ONCE MARKETS RECOGNIZE DEFLATION AS A PHENOMENON, PEOPLE STOP BUYING!
Yep.
Ask yourself, If you KNOW housing prices are DECLINING, WOULD YOU BUY NOW? Or WOULD YOU WAIT?
Most people WAIT.
And that causes FURTHER INVENTORY BUILD UP, and FURTHER DEPRECIATION IN PRICES.
Of course ALL of this outright ignores MAJOR portions of certain deflationary spiral theory that concerns itself with the treasury markets and interest rates.
IF and WHEN we see RISING RATES and MASS TREASURY SALES in the bond market, the death knell for housing, and likely for the entire economy will have sounded.
I am just not sure you can argue against that using as your strongest points of contention, comments about 20 year olds living in basements and such.
If I was to smile and I held out my hand
If I opened it now would you not understand?
Citibank may not "fail",
but if the waters get any rougher (certainly seems like it)
they sure as hell may end up as nothing more than a part of JP Morgan Chase or some such.
You do realize that in all probability, a general economic implosion would only serve to strengthen the statist interests and control?
I'd love to sit here and play revolutionary advocate,
believing blindly that, if the economy failed outright and the government reacted by implementing "continuity of government" (martial law) plans, that the "proud people of America" would unite and revolt -- reclaiming their rights and their government.
However, history tells us different.
Even when faced with troops in Boston, bloodshed at Lexington, and the outright destruction of Falmouth by bombardment ... even AFTER all of these atrocities, the vast disbelief that the mothercountry would really murder her children kept the Continental Congress from even being able to consider independence and real preparation for war.
What i mean to say is, even faced with 10 years of obvious rights violations, unrepresentative government, and outright acts violence against them from the British Government, THREE FOURTHS OF THE PEOPLE WERE STILL TORY AND WERE STILL HOPING FOR RECONCILIATION WITH THEIR GOVERNMENT.
I just don't see any reason to believe that this time around it would be any different. Especially since we don't have the physical separation of an ocean between our current oppressive government and the people, it is just that much harder for the masses to come to the recognition that it is no longer "their" government. Lets face it, revolutions -- real revolutions - are led by a small handful of infinitely dedicated and highly intellectual men.
I JUST DON'T SEE THOSE NECESSARY SEEDS BEING PRESENT.
And even if they were, the people are no where NEAR the necessary state of consciousness to accept the idea.
If the economy implodes, it will be every excuse "our" government needs to lay the screws to us plain, and clamp down on our liberties to no end.
:(
If I was to smile and I held out my hand
If I opened it now would you not understand?
You do realize that in all probability, a general economic implosion would only serve to strengthen the statist interests and control?
I'd love to sit here and play revolutionary advocate,
believing blindly that, if the economy failed outright and the government reacted by implementing "continuity of government" (martial law) plans, that the "proud people of America" would unite and revolt -- reclaiming their rights and their government.
However, history tells us different.
Even when faced with troops in Boston, bloodshed at Lexington, and the outright destruction of Falmouth by bombardment ... even AFTER all of these atrocities, the vast disbelief that the mothercountry would really murder her children kept the Continental Congress from even being able to consider independence and real preparation for war.
What i mean to say is, even faced with 10 years of obvious rights violations, unrepresentative government, and outright acts violence against them from the British Government, THREE FOURTHS OF THE PEOPLE WERE STILL TORY AND WERE STILL HOPING FOR RECONCILIATION WITH THEIR GOVERNMENT.
I just don't see any reason to believe that this time around it would be any different. Especially since we don't have the physical separation of an ocean between our current oppressive government and the people, it is just that much harder for the masses to come to the recognition that it is no longer "their" government. Lets face it, revolutions -- real revolutions - are led by a small handful of infinitely dedicated and highly intellectual men.
I JUST DON'T SEE THOSE NECESSARY SEEDS BEING PRESENT.
And even if they were, the people are no where NEAR the necessary state of consciousness to accept the idea.
If the economy implodes, it will be every excuse "our" government needs to lay the screws to us plain, and clamp down on our liberties to no end.
:(
Alas you are right, and most people seem conditioned to believe the state is or necessarily must be their savior ("we" just need the right people in charge!), so they will willingly accept more.
Comments
I wouldn't touch it.
Period.
Citibank may not "fail",
but if the waters get any rougher (certainly seems like it)
they sure as hell may end up as nothing more than a part of JP Morgan Chase or some such.
As for all this counterargument about deflation
1. Sure deflation can be "good" for resetting the system, but the key in your quote (dmitry) was this:
Thats one HELL of a gamble!
:(
2.
SPONGER -- I think you have some valid arguments as for what CAN cause deflationary spirals, but your analysis is so limited in scope that you fail to recognize OTHER valid mechanisms by which the deflationary spiral can be both triggered and exacerbated.
I'm not going to pick apart the whole post, because i don't feel it is my duty ... besides, you have some awfully strange connections in there -- somehow bringing 20 year olds staying at home in to the mainstream of the argument? -- but anyhow ...
When you say deflationary spirals are caused by employers stuck paying, and who "can no longer pay" inflated salaries to employees ... SURE that is accurate ... but fuck the line "inflated" salaries ... we don't need the qualifier ...
HOW ABOUT: EMPLOYERS CAN NO LONGER PAY EMPLOYEES, PERIOD.
THIS circumstance would be ENOUGH, BY ITSELF to at least start a round of demand-deflation-producing layoffs.
And THAT is WHERE WE ARE AT.
As liquidity and lending grind ever closer to a halt, large businesses are becoming STRAPPED FOR CASH TO MEET EVEN BASIC FUNCTIONS LIKE PAYROLL AND DISTRIBUTION. As THAT happens, you will watch the lay-offs continue to INCREASE.
Hell, THE FOMC ITSELF has this as a MAJOR concern going forward.
So.
Deteriorating economy in to and THROUGH 2009 ...
and INCREASING UNEMPLOYMENT through next year as well.
AND, THE FED MINUTES ALWAYS SEEM TO LAG THE REALITY OF THE DETERIORATION -- meaning that they say 7.1% to 7.5% next year, but by January, that number could be looking more like 8.5% to 9.5% ...
:(
The only other relevant portion of your post that i will counter is that of the houses being a special asset class that is more resistant to deflation due to its utility ... THIS IS OUTRIGHT FALSE.
Housing is tied significantly TO EMPLOYMENT ... and as employment deteriorates, you will see housing markets across the country further deteriorate in a regionalized fashion ...
ALSO, ONCE MARKETS RECOGNIZE DEFLATION AS A PHENOMENON, PEOPLE STOP BUYING!
Yep.
Ask yourself, If you KNOW housing prices are DECLINING, WOULD YOU BUY NOW? Or WOULD YOU WAIT?
Most people WAIT.
And that causes FURTHER INVENTORY BUILD UP, and FURTHER DEPRECIATION IN PRICES.
Of course ALL of this outright ignores MAJOR portions of certain deflationary spiral theory that concerns itself with the treasury markets and interest rates.
IF and WHEN we see RISING RATES and MASS TREASURY SALES in the bond market, the death knell for housing, and likely for the entire economy will have sounded.
I am just not sure you can argue against that using as your strongest points of contention, comments about 20 year olds living in basements and such.
If I opened it now would you not understand?
thanks for the input...:)
I'll sit back, watch, and see what happens...
I wish it was a sure thing, not a gamble!
You do realize that in all probability, a general economic implosion would only serve to strengthen the statist interests and control?
I'd love to sit here and play revolutionary advocate,
believing blindly that, if the economy failed outright and the government reacted by implementing "continuity of government" (martial law) plans, that the "proud people of America" would unite and revolt -- reclaiming their rights and their government.
However, history tells us different.
Even when faced with troops in Boston, bloodshed at Lexington, and the outright destruction of Falmouth by bombardment ... even AFTER all of these atrocities, the vast disbelief that the mothercountry would really murder her children kept the Continental Congress from even being able to consider independence and real preparation for war.
What i mean to say is, even faced with 10 years of obvious rights violations, unrepresentative government, and outright acts violence against them from the British Government, THREE FOURTHS OF THE PEOPLE WERE STILL TORY AND WERE STILL HOPING FOR RECONCILIATION WITH THEIR GOVERNMENT.
I just don't see any reason to believe that this time around it would be any different. Especially since we don't have the physical separation of an ocean between our current oppressive government and the people, it is just that much harder for the masses to come to the recognition that it is no longer "their" government. Lets face it, revolutions -- real revolutions - are led by a small handful of infinitely dedicated and highly intellectual men.
I JUST DON'T SEE THOSE NECESSARY SEEDS BEING PRESENT.
And even if they were, the people are no where NEAR the necessary state of consciousness to accept the idea.
If the economy implodes, it will be every excuse "our" government needs to lay the screws to us plain, and clamp down on our liberties to no end.
:(
If I opened it now would you not understand?
Alas you are right, and most people seem conditioned to believe the state is or necessarily must be their savior ("we" just need the right people in charge!), so they will willingly accept more.
I still want to see it.