Grab a seat cause the music is about to stop...

[KAG]

Looking at the world markets, the debt issues in the USA and Europe, I'd say were going in deep this time and if you have a good seat hold onto it, cause this could get ugly.

[Changes in Latitudes]

Hordes of panicky people seem to be evacuating the town for some unknown reason. Professor, without knowing precisely what the danger is, would you say it's time for our viewers to crack each other's heads open and feast on the goo inside?
Professor: Mmm, yes I would, Kent.

[grimey]

Shocked by the inability of the federal government to prevent a downgrade, Alaska has seceded from the union:

http://money.cnn.com/2011/08/06/news/in ... ?hpt=hp_t2

[Mig29]

Classic! That's why I can't watch CNN....it's too smart for me!

But not to derail from KAG post, yes - this is going to be very interesting!! But we all knew that...don't take my word for it, just listen to this guy.

[ogc]

I dunno, this latest bout is all in response to S&P's actions.

It wont last as their decision really isnt based on anything too concrete.

They are a credit rating agency, and one of many who also recommended purchasing the toxic mortgage debts that started all this nonsense in the first place.

My question would be what did S&P have to gain from downgrading the debt, when many other agencies did not?

It all just seems like smoke and mirrors to me.

[AEROBAT]

Judging from what Congress and the Fed did in 2008, in response to the market crash then, I am more worried about the economic "cure" they dream up this time than the actual crash itself

Yes...it will be interesting.

Remember S&P had given all those banks that failed in 2008 AAA ratings so I don't hold much faith in their judgement either.

[KAG]

The problem is the USA. They currently have around 16 trillion in Debt, if the FED releases QE3 (stimulus spending) it will up their debt, and devalue there dollar even more. The USA is our biggest trading partner, and with a high loonie, and reduced consumer spending it could impact Canada greatly. Europe is a mess, possible collapse of the Euro. If people get spooked (which they are) travelers won't take that extra trip and hold onto their money. Aviation is the first to be hit, and the last to recover. If the majors slow down, it’s a trickle down effect.
I don't think were entering a new recession, I don't think we recovered from the 08 crash as the markets were artificially pumped up by trillions of stimulus spending.
I hope I’m wrong, but at some point we need to repay the debt.
I won’t even get into the future shortfalls in under funded social spending for the baby boomers over the next 20 years.

Sky might not be falling, but it is clouding over.

[FL_CH]

For as long as I remember, tomorrow was always worse than today. Live at 80-90% of your means, stay flexible, and you'll be alright. Unfortunately, these days it means that I can't afford such things as children...

[Changes in Latitudes]

The problem is the USA. They currently have around 16 trillion in Debt, if the FED releases QE3 (stimulus spending) it will up their debt, and devalue there dollar even more. The USA is our biggest trading partner, and with a high loonie, and reduced consumer spending it could impact Canada greatly. Europe is a mess, possible collapse of the Euro. If people get spooked (which they are) travelers won't take that extra trip and hold onto their money. Aviation is the first to be hit, and the last to recover. If the majors slow down, it’s a trickle down effect.
I don't think were entering a new recession, I don't think we recovered from the 08 crash as the markets were artificially pumped up by trillions of stimulus spending.
I hope I’m wrong, but at some point we need to repay the debt.
I won’t even get into the future shortfalls in under funded social spending for the baby boomers over the next 20 years.

Sky might not be falling, but it is clouding over.

That's much better; well said. I was worried about you for a second there.

[KAG]

been reading too many economic forums lately.
On a good note, I'm glad I bought gold...

[TTJJ]

If you look at the bottom right hand corner of that map where Alaska is still AAA, you will note the source of the data as being from Moody's, another credit rating agency like S&P.
Just another fail...

[cdnpilot77]

Here is what the US debt currently looks like in $100 bills

[Mig29]

Sky might not be falling, but it is clouding over.

That's well said KAG.

But I guess we'll see at the end. No one foreseen the 2008 meltdown, right? So it may see all calm and rosy now, but I'm not buying it.

[ogc]

Sky might not be falling, but it is clouding over.

That's well said KAG.

But I guess we'll see at the end. No one foreseen the 2008 meltdown, right? So it may see all calm and rosy now, but I'm not buying it.

One investment broker did... Some guy in California, everyone called him a crackpot but he made millions selling short.

There was a write up on him in Forbes or some other magazine, he basically quit after he made his millions.

I remember a few years ago like 2006 I think, when I was talking to some people in the gold industry. Gold was at like 400 or 450 an ounce back then, and they were telling me how within a decade they expected it to hit $2000. I thought they were nuts, but low and behold.

[KAG]

Lots of people saw and warned of the 08 crash, no one wanted to listen. I read a book called the empty tank (peak oil) and it had an entire chapter dedicated to impending housing crash, and this was written in 05!

[scopiton]

pretty well said KAG, we'd better wait for the fed to increase interest rates and see if other agencies change their rating before forecasting for the worst (but I agree it doesn't look good at all ).... for as long as the chinese don't change their yuan policy to compensate for the u.s dollar fall.
note : the oil closed at $81.11 which is the lowest since last October ans thats good for our business...

[ahramin]

the oil closed at $81.11 which is the lowest since last October ans thats good for our business...

It's only good for those airlines that don't have a huge department in charge of loosing money on fuel hedges. So Westjet will be doing well anyway.

[coreydotcom]

Hindsight is 20/20.

I too should have bought gold at $400 but if we were all able to predict the future, we would all be billionaires, no?

Although I did buy Toyota when they crashed hard. I think it'll work out.

[AEROBAT]

Sky might not be falling, but it is clouding over.

That's well said KAG.

But I guess we'll see at the end. No one foreseen the 2008 meltdown, right? So it may see all calm and rosy now, but I'm not buying it.

Mig29

I hope your statement was tounge in cheek and I believe it was. Unfortunately hundreds of economists were definately predicting exactly what happened in 2008 however they were ignored. When the bailout started, QE 1, they cried foul and said this is only delaying the inevitable. They were right of course. as we are seeing.

Who knows what childish crap they are planning to save the economy with now?

[ei ei owe]

I say watch out for your upcoming personal financing timelines. Pay your own debts rather than investing now trying to make a quick buck. We all know interest rates will go up and when that mortgage come up, you'd better be in good shape. Thaz whud i thinks.

Yes gold would'a been nice at 400/oz but to get in now would be hazardous!

Now it's time to wait for the banks to slide on the TSX and get in while cheap.

[Mig29]

I just want to know if its better to buy property now, or wait it out??

Or just start running for the hills

[North Shore]

^ Well, the babyboomers are getting on into their retirement years, there's fewer echo-ers coming along, so who's going to buy all of those nice big 5/6/7 bedroom homes in the suburbs? And, if they don't sell, then what's going to happen to the prices?

[172pilot]

We all know interest rates will go up and when that mortgage come up, you'd better be in good shape. Thaz whud i thinks.

Yes gold would'a been nice at 400/oz but to get in now would be hazardous!

I think we're going to have extremely low interest rates for a long time to come. Economic activity isn't going higher and it wont warrant higher rates anytime soon. Yes, we had a bit of a recovery, but unemployment is still high and the "new" jobs are call centres and part time retail. Higher rates would also raise the CDN dollar higher which wont benefit us either.

I bought long term bonds and gold two years ago, when everyone was saying rates would go higher but they keep falling as bond prices rise. The bond market tells all. Right now, it's saying long term rates are heading lower probably because nobody believes the current recovery has much steam left in it. Long term rates have been falling all year.

I wouldnt be surprised to see gold hit 2000$ either.

Keep in mind, as crazy as lower rates sound, Japan has had 0% long term rates for a very long time now as they try to kick start their economy.

[dirk82]

As much as I hate to say it were going to be on the slide for a few years, there's an estimated 9 million baby boomers coming on 65 in 2011. That's 9 million people looking to unload there McMansions and more so 9 million people looking to start collecting on rrsp's. If let's say every one of those has $10,000.00 in rrsp, there going to want to pull that out of the market. Do the math, thats a fair number to be pulling out of the market. Thats Canada alone, take another 9 million people looking for govt pensions to paid out soon. It's going to be like this for a while. Move to bc and grow weed, that market never dies.

Garth turner has a few good books out on the whole situation. He sells the doom and gloom a bit much but the "greater fool" and "money road" are 2 books worth having a look at. Robert kiyosaki's last book wasn't terrible either but it's a bit hard to take serious when he was one of the guys screaming borrow more and buy more real Estate back in 05 but worth a read, he has some good insight.

[trey kule]

Unfortunately, these days it means that I can't afford such things as children...

That is really to bad, as children are what makes life ultimately worth living. In any event, you must continue to keep in practice for the making of same, until the time is right.