Barclays: There is going to be a deep global recession over the next three years

That the American economy needs to be blown up.

 

I am normally an eternal optimist in all matters except the Cubs.

But I worry myself into sickness over this.

 

Actually, inasmuch as the economic policies are his responsibility, they are. Are there other contributing factors? Of course. But stop acting as though every time someone says something bad about Bush, they're pissing on your mother's grave.

The United States is not a fucking island. We're the most important country in the world, and what we do has a very real, very tangible effect on the rest of the world. Isolationist bullshit like yours is part of the reason we have such a problem in the first place.

 

Moddy has no idea why he just started fiddling with a Master Lock.

 

Re: Barclays: There is going to be a deep global recession over the next three y

Stories like this make me really fear for the future.

 

SO, what do I do with my retirement investment? Do I pull it out completely? Do I move it to a "low risk" mutual fund? This is scary shit.

 

How old are you? If you're in your 20s and 30s, and you believe the economy will come back before you retire (and it surely will), then any money you put in a 401(k) is being used to buy stock at depressed prices. The key to sensible retirement planning (at least according to sensible financial types, however trustworthy they are) is NOT to act in a short-term manner. Over the course of 30, 35, 40 years, even a two- to three-year market slump is relatively insignificant.

Now, if you're 55, you might want to think about other options. But then you should be doing that anyway at that age, because you need to make sure that the money you already have doesn't go anywhere.

 

Looks to me like the Fed is screwed.

Drop interest rates further, and the dollar goes in the shitter and oil prices rise, and you get even more inflation.

Raise interest rates, and the dollar gets stronger (which will help oil prices) but the economy goes into the tank.

The economy sucks right now as it is. It may be time for some hard medicine and to go ahead and raise rates. That's what the Fed did in the early 80s when we had our last oil shock. It was bad, but it stopped inflation and we came out better for it.

 

Yesterday I did a quick calculation on the 10 year return of the S&P 500 for the past 10 years (June 30, 1998 to yesterday). The annual return? 1.2%. That's not a misprint. 1.2%. Add in dividends reinvested, and its probably up around 3%. That doesn't even cover inflation.

 

Right. That's because our fortunes and misfortunes are not tied into the global marketplace... amazing.

 

Not for much longer.