If the economy tanks now due to a worldwide crash, do not expect this to benefit

[pnwmom]

ANY Democrat, no matter how much you believe in him.

It won't matter that Congress is dominated by the Rethugs. The President will be blamed, and so will his party -- for everything that happens in the WORLD.

[A HERETIC I AM]

1. That ain't gonna happen.

OK....I'm no economics expert, but this recent rout, from what I have read, is merely a reaction to a SLOW DOWN in the growth of the Chinese economy coupled with them fucking with the value of the Yuan.

It'll pass. A 10% correction perhaps but I doubt much further.

Collapse is highly unlikely, in my not so humble opinion.

The Chinese economy still has positive growth, just not the double digits people had become accustomed to.

[Dawson Leery]

5. +1

[Munificence]

8. Well

"..... is merely a reaction to a SLOW DOWN in the growth of the Chinese economy coupled with them fucking with the value of the Yuan."

It's a lot more in depth than that. China might account for 10-15% of it, the rest is that the Fed cranked $4 trillion into propping things up over the past 4 years, which now they say they are gonna raise rates (won't happen) that $4 trillion of FRN creation was responsible for 20% of GDP in the same time frame...and all we can get is 2% growth in GDP by cranking in nearly a trillion of free money each year?

Also, the U/S has tried to hammer Russia (along with the help of Saudi) on the price of Oil, well the Asian countries are tired of the U.S and the petrodollar and are devaluing their currencies against the dollar. We are no doubt in a monetary war with at least 20 nations. Why do you think oil is so low?

These are interesting times, lot more difficult than simply blaming it on the "Boogeyman Man China", but that is such a great talking point, kind of like "terrorists" and such.

[A HERETIC I AM]

13. "Why do you think oil is so low?"

I have read a couple articles over the last few months that made the case for the Saudis flooding the market in order to shut down the Dakota boom, which has happened, essentially. They want / NEED us to buy their oil. They won't like it one little bit if we become self sufficient.

As I said, I am by no means an expert in these matters. I could be wrong 100 %. I admit it.

But I don't hope for a collapse as MANY Du'ers over the years have indicated, and even though we have been in a bond bubble for a while, I don't see a crash in US Treasuries happening this week or this month.

When yields start climbing like a rocket ship, meaning Treasury bonds are being bid into the toilet, THEN I'll start to get concerned.

But what happened today? There was a run on US Debt paper.

That should tell you something.

FWIW, even though the Federal Reserve has been buying Treasuries these last couple years, don't forget that the bonds pay interest to the holder. In this case, the holder returns the payments to the general fund.

[GummyBearz]

14. A 10% correction has come and gone

We are in for a route that is years over due. This not Obamas fault, and in fact it isn't even Bushes fault. This is what happens when the federal reserve (a private bank) makes it their business to prop up financial gambles (stocks, real estate, bonds). Nothing has fundamentally been changed since the Dow was at 12K. Therefore why would the Dow be above 12k? Other than being propped up... There is blood in the water, and the sharks are swimming circles around everyone's 401k.

[A HERETIC I AM]

15. Sorry, but you just lost all credibility with me.

This is what happens when the federal reserve (a private bank)

Okie dokie!

Have a good day!

[GummyBearz]

17. Who does the federal reserve bank answer to?

They can change their mandate at will, they wont open their books to congress, they don't care about who is president (R or D). They are out for themselves.. that's a private entity


edit: a little more info for you (wikipedia copy/paste, feel free to cite a source if it is incorrect):

In Lewis v. United States,[8] the United States Court of Appeals for the Ninth Circuit stated that: "The Reserve Banks are not federal instrumentalities for purposes of the FTCA [the Federal Tort Claims Act], but are independent, privately owned and locally controlled corporations." The opinion went on to say, however, that: "The Reserve Banks have properly been held to be federal instrumentalities for some purposes."

I expect crickets from here on out, but feel free to surprise me. I look forward to learning something new.

[A HERETIC I AM]

18. LOL

It's OK.

Really. You are free to believe anything you want.

This comes up on a regular basis on DU and is of course, a regular thing on the internet in general.

Next you're going to tell me the Federal Reserve Bank is owned by the Rothschild family.

[GummyBearz]

19. ROFL

They are owned by GS, JPM, MS, C, etc.

Keep working young padawan. You never had credibility to start with, so it may take time to get an ounce

[A HERETIC I AM]

20. Aren't you the clever little one!

They are owned by GS, JPM, MS, C, etc.

Find all that out with a single Google search, didya?

Or did you have to go to a few of your favorite websites to get all of the initials correct?

You have only been here a short time, so let me clue you in a bit.

You are one in a long line of others. You aren't impressive and you aren't original.

You are boring, banal and predictable and you know it.


Have fun!

[GummyBearz]

23. No need for a special google search

I own shares in most of them, and have family members working for the other two. As gross as it makes me feel, why fight them when you can retire with them? Thank you for your tax $ btw

[yeoman6987]

26. I don't know who will be blamed but president most likely

President bush was blamed for the 07-08 crash and the Congress was democratic so who knows what will happen and who will be blamed.

[snooper2]

34. Chinese have screwed themselves, too many 20 something males with almost nothing to do

building cities the size of Houston to house enough people to fill Saginaw LOL

[randys1]

2. Democrats never cause the financial problems and ALWAYS get blamed for them, period.

[DJ13]

3. It depends on how the crisis is framed, and who is running

People are already upset with the amount of power corporations have in DC, so any politicians running in 16 that are corporate sponsored will get whacked.

That will impact both parties.

From a third way/conservative viewpoint this crisis comes at the worst time imaginable.

[kimbutgar]

4. But don't you know everything bad that happens in the world is Obama's fault?

I would bet you that tonight someone on Fox will blame President Obama for China's stock market meltdown. President Obama was on vacation and it's all his fault they will say.

They will blame the Democrats even though republican's control 2 branches of our government. The re thugs never admit they are at fault and they kept us from going after the banisters because they are the " job creators ". The stupids who are worshipping Trump will blame our President. I have yet to hear Trumps comments on this from a policy view nor any other rethug 2016 candidate.

[Kelvin Mace]

6. Kind of hard to duck responsibilty

when your front runner has been taking six figure speaking fees from Wall Street banks.

[pnwmom]

10. Nonsense. The front runner has nothing to do with the Chinese economy,

which began this free-for-all.

[Kelvin Mace]

24. One more time...

If the economy tanks, HRC's cozy relations with Wall Street bankers is going to haunt her. Despite all of the evidence that the system is badly broken and ripe for abuse, the Democratic leaders have failed/refused to reform the system, even when they controlled ALL the levers of power.

Anybody with Wall Street money in their pockets is going to be blamed, and rightly so.

[pnwmom]

25. If there is a worldwide recession beginning in China, it won't much matter

what reforms we have here. We're still screwed.

[Kelvin Mace]

33. China might be the trigger,

but failure to regulate the markets will be the warhead. Despite all that happened from 2007-2009, the Democratic leadership simply refused to:

1) Regulate the derivatives market, a method of investing as about as reliable as astrology in which we now have somewhere between $710 trillion to $1.2 quadrillion at risk.

2) Regulate the mortgage/housing market, thus the real estate bubble is being re-inflated with entirely predictable results when it pops AGAIN. This time Wall Street is buying up all these houses that were foreclosed on and creating holding companies to rent them to the very people they kicked out, and are going back to the same "collateralization" model to "bundle" houses and re-sell to clueless investors who buy with complete confidence that they will get bailed out like last time when the "last fool standing" scheme blows up.

3) Regulate buying on margin, so as to prevent people using borrowed money to invest in the two schemes. Margin debt reached a half trillion dollars last month, up 70% from Sept 2008 the last time economy imploded.

Yes, China may be playing with fire, but our financial house is made of oily rags and balsa woods while Wall Street hands out books of matches to every toddler in America and tells them how cool fire is. They have also made sure that the fire marshal's have loads of money in their pockets to keep them looking anywhere but at the coming conflagration.

[Codeine]

7. The economy won't collapse.

This is a market correction. It'll settle out shortly and we can get back to real news.

[Chan790]

9. It'll benefit a non-Democrat.

This non-Democrat.



The economy crashes and it's all over for both party establishments. Too many people are too pissed off for the mainstream bases of the establishment of either party to be left in good shape.

[pnwmom]

11. Dream on. He's running as a Dem and he's voted with the Dems

for the vast majority of his votes in Congress.

If Obama's policies are erroneously blamed for a collapse of the Chinese economy, no progressive will benefit.

[Chan790]

12. Neither will the mainstream base of the GOP.

All an Obama "failure" will do is provide "proof" that Democrats can't run the economy either...the American public already knows the GOP can't because of the Shrub presidency. They say as much. There is no large base of people that thinks the GOP is good at running the economy, even now years after Bush left office.

So...it certainly doesn't benefit anybody on the GOP side either. (Except possibly Donald Trump who will probably self-immolate for unrelated gaffes before he can actually benefit.)

If the economy crashes for any reason...it's not progressives that will suffer it, it's the establishments of both parties. It benefits outsiders.

I don't need to dream...I have an MA in political theory from a top-tier graduate program in politics. I get paid to know these things. Americans currently believe that Democrats are better at managing the economy...an Obama "failure" can't prove that the GOP can manage the economy, only that Democrats are also bad at it.

It's at-worst a wash issue.

[pnwmom]

16. No, it wouldn't be a wash. The President in power is always blamed, not Congress.

If there's a major downturn, the Rethugs are very likely to win, no matter who they run. But it looks very likely that they will run an outsider. Donald Trump.

And he will blast Bernie as an insider.

[nadinbrzezinski]

21. As I posted on the OP I started

this is a big if... Following the markets tonight. and it looks like a mini rally is starting. So it is what analysts said, a correction.

Many a times I go into the worst case scenarios as mental exercises, and reality is, for many structural reasons we are at a medium to long term crisis point for capitalism. A lot of it has to do with what is inside your computer... and how it is allowing to eliminate whole swaths of the employment sector. It is not just burger flippers but cardiac surgeons that could face losing their jobs.

[TheFarseer]

22. anyone who thinks they know what the stock market will do short term is a fool.

It could rebound tomorrow because someone posts great earnings or the Fed or China does something or keep crashing. PE ratios are actually pretty low for one thing and interest rates are low. Even if a guy is correct that it's bound to crash, it could move up 30 percent before crashing and you'll have missed out on a big move. I'm not saying anyone here is wrong. I'm just saying don't think you can predict stock market moves. I think that's the first thing an investor needs to learn.

[Hydra]

27. If things crash hard, The Dem Leadership rightly owns it

This is all happening because of policies they support. We had a chance to do something greater, and it was squandered in favor of bribes.

[pnwmom]

28. If the world's economy is crashing, the US couldn't single-handedly stop it.

And it couldn't be blamed on Obama's policies -- with justification. But people will, anyway.

[Hydra]

29. Why would we need to save the world?

We needed to save US, and put the Banksters in jail. We missed the opportunity and fed them free money instead of getting people back to work.

We could have helped the world in doing so, but we usually "help" the world by invading people instead. That was a great stimulus...

[pnwmom]

30. We can't. But our economic system is intricately connected to the rest of the world's.

There is nothing we could do to exempt ourselves if the world's economy was crashing, no matter who was President or in Congress.

[Hydra]

31. Oh, so we shouldn't have even tried?

Shouldn't have sent Lloyd and Jaime to jail? Shouldn't have tried to get everyone back to work, shouldn't have tried to have Obama's proposed "Green Revolution" because it was futile?

I don't get where this strain of powerlessness comes from in our party. We would have had many more options right now if we had done the right thing, rather than the politically expedient and profitable thing. I read somewhere that Janet Yellen is probably not sleeping well, considering the Fed is in a VERY bad position right now to try and revive things. Unless this is all according to plan, I bet that's true.

We own it. Your candidate owns it. This obscene propping of Wall St. is not some Republican plot, it's a feature of this Administration.

Then again, don't own it. Pretend our party is against it. Why would it matter, since it couldn't POSSIBLY be any of our fault.

[pnwmom]

32. Of course we should try. But it's not our economy that appears to be leading a crash

right now. It's China's.