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This will be a short bubble. - Greece is about to default any minute now. After that, Ireland/Portugal/Spain/Austria/Italy will soon follow. - Japan is suffer

This will be a short bubble. - Greece is about to default any minute now. After that, Ireland/Portugal/Spain/Austria/Italy will soon follow. - Japan is suffering -5% GDP per year - China is starting to have internal riots in major cities because of high inflation. Also, lots of their high flying companies are starting to be investigated for fraud. Thus the recent 30-40% drops in their stock prices. - US is about to default technically by not raising their debt ceiling. All signs point to the second dip in the global economic depression.

arethuza 15y ago
The Asian Financial Crisis happened during the the last bubble: http://en.wikipedia.org/wiki/1997_Asian_financial_crisis http://en.wikipedia.org/wiki/1997_Asian_financial_crisis
- chailatte 15y ago
  They were able to paper that crisis over by massive printing of currency. Not this time (look at the high inflation riots in China)
nodata 15y ago
How did Austria get into that list?
- chailatte 15y ago
  Austria debt levels must get to safer ground - IMF http://www.reuters.com/article/2011/06/14/austria-economy-idUSVIF00007920110614 http://www.reuters.com/article/2011/06/14/austria-economy-id...
  - nodata 15y ago
    "IMF sees low risk of Austria losing AAA rating" http://www.reuters.com/article/2011/06/14/austria-rating-idUSVIF00008120110614 http://www.reuters.com/article/2011/06/14/austria-rating-idU... I still don't see how this puts them in the same category as Greece.
yaakov34 15y ago
I can be a pessimist with the best of them, but this is just panic-mongering. -- The US would be insane to default; their debts are mostly internal, and in their own currency, which they can just inflate. Unpleasant for Americans, whose pensions and savings are going to be worth a lot less, but this is how you pay for living beyond your means. If they need to change some technical rule, they will find a way of doing that, rather than default on debts and cause chaos. -- Unlike Iceland, which physically lacked the money to pay its debts, Greece simply doesn't want to cut its government spending by 10% and pay its creditors. They are a sovereign nation, so nobody can force them to. Fine. After they default, and the financing gets cut off anyway, they will have to cut spending even more. Maybe after other nations will see how that works out for them, they will think twice about not paying debts that they voluntarily took on. Or maybe not. But let's not start hyperventilating about an Austrian default just yet. -- China has had two decades of solid economic growth. Make that fantastic economic growth. I am not talking about numbers on paper, it's growth measured in concrete and steel and food. They'll live through a correction if they have to.
- chailatte 15y ago
  - US: Semantics. US is already silently defaulting by massive printing its currency (thus devaluation of its debt). Regular citizens' social security, medicare, and savings are wiped out. Still points to economic depression. - Europe: They all will default. If one country in EU doesn't pay its debt back, why should the other countries in EU pay theirs? Major banks in EU suffers massive loss of value. Still points to economic depression. - China: Yes, they will go through a correction. However, since they packed 40 years of economic growth into 10 years, the correction will be brutal (oversupply in housing, capacity, human resources). Still points to economic depression.
  - yaakov34 15y ago
    You're seeing everything in a hypertrophied way. -- There is a difference between a default on debts and inflation. People can live with inflation. A default on the freaking US treasury debt would be a disaster. Why would they do that, given that they absolutely don't have to? No, it's not the same thing. -- Also, speaking of seeing everything larger and scarier than it is, you really need to remember how good life is for most Americans. Some of the economic hard-lack stories make pretty funny reading for someone outside the US. Americans have borrowed to finance some pretty extravagant spending, and the federal government is by far not the worst of it; browse Philip Greenspun's blog at http://blogs.law.harvard.edu/philg http://blogs.law.harvard.edu/philg for some stories on state pensions. At some point, they will pay for this. This doesn't mean that Americans will be rooting through garbage and living on the street; the US still has the capacity to produce more than enough food and housing. Yeah, the spending binge will be over and it will be unpleasant. -- Europe is not going to default on all its debts. That's a dumb move, and they know it. Argentina had essentially no economy for years after its default; no jobs, no banking, no credit, no business. Iceland is not exactly partying now after its bailout. I don't think they will be standing in line to join this club, and again, this is not a question of a lack of money; Greece has a spineless government and aggressive unions, and they simply don't want to pay up and expect a bailout which won't come, or at least won't be on pleasant terms. -- China has immense reserves to enable it to live through a correction. You can do that in a (somewhat) planned economy.
jerf 15y ago
Failing to raise the debt ceiling is not a US default. The US receives more than enough income to cover its debt service, which also has priority. Equating failure to raise the debt ceiling with a default is a political ploy that nobody seems particularly in a hurry to debunk as both sides thinks it serves their purpose; if we're really unlucky they'll turn it into a default for political points. What we don't have is enough income to also do everything else we want to do. Some level of "default" via inflation I would agree with, though; it isn't "technically" default but it's certainly a way of unilaterally decreasing the amount of wealth the payoff of the debt entails and that certainly has many of the relevant characteristics of a default.
- timr 15y ago
  "Failing to raise the debt ceiling is not a US default. The US receives more than enough income to cover its debt service, which also has priority." That's a Republican party talking point, not a fact. Everyone knows that debt service has priority. They also know that it's non-trivial to just stop paying for other services, and that even if it were easy to do, it would be seen as a serious lapse of judgment by our creditors. You don't have to default to get hammered by rising interest rates on your debt; you merely have to look irresponsible enough to be a bad risk.
  - jerf 15y ago
    Per my other reply, the word "default" means something, and I think we should resist the temptation offered by politicians to turn it into the semantic equivalent of a synonym for "bad... financial... thingy..." and then rush to apply it haphazardly to everything faintly resembling someone not receiving money they think they have a claim to. It may certainly be the case that our creditors would not take kindly to us ramming into the debt ceiling and hard-cutting off services. But if you fall into the "default/not-default" "bad thingy.../not bad thingy..." semantic trap, you're not looking at the real situation. Our creditors may not take kindly to us simply raising the debt ceiling indefinitely, either. Resist the false dilemma the politicians are trying to offer us by collapsing the domain of discourse like that; there's much more than just "raise it" and "not raise it".
  - 15y ago
freshfunk 15y ago
This is something of a non sequitur. The debate is around the tech bubble not the various global financial crisis. While one may affect the other, the debate is around the bubble. You imply that the global economic situation may cause this bubble to burst or deflate. It actually tends to be the other way around. Hot markets can pull economies out of (or into) recession. The housing/internet markets contributed to the boom years during the Clinton era (and pulled us out of the recession of the 80s). Over-leveraged, cheap-money financial markets pulled us into one. It may be the case that this next internet "bubble" helps bring us out of our current economic malaise.
dxbydt 15y ago
" US is about to default technically by not raising their debt ceiling." 1. currently it costs 40,000$ to insure 10,000,000$ US debt, versus 1,700,000$ to insure equivalent Greece debt. though CDS prices are definitely trending upwards http://www.structuredcreditinvestor.com/industryresearch/ http://www.structuredcreditinvestor.com/industryresearch/ 2. like meredith whitney said on cnbc last week, partially servicing debt is a default, but the market doesn't think so. you can take haircut on coopon. Or delay coupon. All these are valid TDRs ( troubled debt restructuring) but is a TDR a default ? She posed a question - if senior citizen with a million in bonds is waiting for his coupon for meeting expenses, & you delay that coupon by a month, from his pov its a default, from mkt pov that's a restructuring. 3. Strongly agree with the rest of your thesis ie. Greece & PIGS will default. Hyperinflation in US is virtual certainity. Dunno about US technical default - we'll end up doing that from an accounting standpoint, but then get creative about the nomenclature.
- MaysonL 15y ago
  Hyperinflation in US is virtual certainity. Anybody betting on this will go broke.

arethuza 15y ago

The Asian Financial Crisis happened during the the last bubble: http://en.wikipedia.org/wiki/1997_Asian_financial_crisis http://en.wikipedia.org/wiki/1997_Asian_financial_crisis

chailatte 15y ago
They were able to paper that crisis over by massive printing of currency. Not this time (look at the high inflation riots in China)

nodata 15y ago

How did Austria get into that list?

chailatte 15y ago
Austria debt levels must get to safer ground - IMF http://www.reuters.com/article/2011/06/14/austria-economy-idUSVIF00007920110614 http://www.reuters.com/article/2011/06/14/austria-economy-id...
- nodata 15y ago
  "IMF sees low risk of Austria losing AAA rating" http://www.reuters.com/article/2011/06/14/austria-rating-idUSVIF00008120110614 http://www.reuters.com/article/2011/06/14/austria-rating-idU... I still don't see how this puts them in the same category as Greece.

yaakov34 15y ago

I can be a pessimist with the best of them, but this is just panic-mongering. -- The US would be insane to default; their debts are mostly internal, and in their own currency, which they can just inflate. Unpleasant for Americans, whose pensions and savings are going to be worth a lot less, but this is how you pay for living beyond your means. If they need to change some technical rule, they will find a way of doing that, rather than default on debts and cause chaos. -- Unlike Iceland, which physically lacked the money to pay its debts, Greece simply doesn't want to cut its government spending by 10% and pay its creditors. They are a sovereign nation, so nobody can force them to. Fine. After they default, and the financing gets cut off anyway, they will have to cut spending even more. Maybe after other nations will see how that works out for them, they will think twice about not paying debts that they voluntarily took on. Or maybe not. But let's not start hyperventilating about an Austrian default just yet. -- China has had two decades of solid economic growth. Make that fantastic economic growth. I am not talking about numbers on paper, it's growth measured in concrete and steel and food. They'll live through a correction if they have to.

chailatte 15y ago
- US: Semantics. US is already silently defaulting by massive printing its currency (thus devaluation of its debt). Regular citizens' social security, medicare, and savings are wiped out. Still points to economic depression. - Europe: They all will default. If one country in EU doesn't pay its debt back, why should the other countries in EU pay theirs? Major banks in EU suffers massive loss of value. Still points to economic depression. - China: Yes, they will go through a correction. However, since they packed 40 years of economic growth into 10 years, the correction will be brutal (oversupply in housing, capacity, human resources). Still points to economic depression.
- yaakov34 15y ago
  You're seeing everything in a hypertrophied way. -- There is a difference between a default on debts and inflation. People can live with inflation. A default on the freaking US treasury debt would be a disaster. Why would they do that, given that they absolutely don't have to? No, it's not the same thing. -- Also, speaking of seeing everything larger and scarier than it is, you really need to remember how good life is for most Americans. Some of the economic hard-lack stories make pretty funny reading for someone outside the US. Americans have borrowed to finance some pretty extravagant spending, and the federal government is by far not the worst of it; browse Philip Greenspun's blog at http://blogs.law.harvard.edu/philg http://blogs.law.harvard.edu/philg for some stories on state pensions. At some point, they will pay for this. This doesn't mean that Americans will be rooting through garbage and living on the street; the US still has the capacity to produce more than enough food and housing. Yeah, the spending binge will be over and it will be unpleasant. -- Europe is not going to default on all its debts. That's a dumb move, and they know it. Argentina had essentially no economy for years after its default; no jobs, no banking, no credit, no business. Iceland is not exactly partying now after its bailout. I don't think they will be standing in line to join this club, and again, this is not a question of a lack of money; Greece has a spineless government and aggressive unions, and they simply don't want to pay up and expect a bailout which won't come, or at least won't be on pleasant terms. -- China has immense reserves to enable it to live through a correction. You can do that in a (somewhat) planned economy.

jerf 15y ago

Failing to raise the debt ceiling is not a US default. The US receives more than enough income to cover its debt service, which also has priority. Equating failure to raise the debt ceiling with a default is a political ploy that nobody seems particularly in a hurry to debunk as both sides thinks it serves their purpose; if we're really unlucky they'll turn it into a default for political points. What we don't have is enough income to also do everything else we want to do. Some level of "default" via inflation I would agree with, though; it isn't "technically" default but it's certainly a way of unilaterally decreasing the amount of wealth the payoff of the debt entails and that certainly has many of the relevant characteristics of a default.

timr 15y ago
"Failing to raise the debt ceiling is not a US default. The US receives more than enough income to cover its debt service, which also has priority." That's a Republican party talking point, not a fact. Everyone knows that debt service has priority. They also know that it's non-trivial to just stop paying for other services, and that even if it were easy to do, it would be seen as a serious lapse of judgment by our creditors. You don't have to default to get hammered by rising interest rates on your debt; you merely have to look irresponsible enough to be a bad risk.
- jerf 15y ago
  Per my other reply, the word "default" means something, and I think we should resist the temptation offered by politicians to turn it into the semantic equivalent of a synonym for "bad... financial... thingy..." and then rush to apply it haphazardly to everything faintly resembling someone not receiving money they think they have a claim to. It may certainly be the case that our creditors would not take kindly to us ramming into the debt ceiling and hard-cutting off services. But if you fall into the "default/not-default" "bad thingy.../not bad thingy..." semantic trap, you're not looking at the real situation. Our creditors may not take kindly to us simply raising the debt ceiling indefinitely, either. Resist the false dilemma the politicians are trying to offer us by collapsing the domain of discourse like that; there's much more than just "raise it" and "not raise it".
- 15y ago

freshfunk 15y ago

This is something of a non sequitur. The debate is around the tech bubble not the various global financial crisis. While one may affect the other, the debate is around the bubble. You imply that the global economic situation may cause this bubble to burst or deflate. It actually tends to be the other way around. Hot markets can pull economies out of (or into) recession. The housing/internet markets contributed to the boom years during the Clinton era (and pulled us out of the recession of the 80s). Over-leveraged, cheap-money financial markets pulled us into one. It may be the case that this next internet "bubble" helps bring us out of our current economic malaise.

dxbydt 15y ago

" US is about to default technically by not raising their debt ceiling." 1. currently it costs 40,000$ to insure 10,000,000$ US debt, versus 1,700,000$ to insure equivalent Greece debt. though CDS prices are definitely trending upwards http://www.structuredcreditinvestor.com/industryresearch/ http://www.structuredcreditinvestor.com/industryresearch/ 2. like meredith whitney said on cnbc last week, partially servicing debt is a default, but the market doesn't think so. you can take haircut on coopon. Or delay coupon. All these are valid TDRs ( troubled debt restructuring) but is a TDR a default ? She posed a question - if senior citizen with a million in bonds is waiting for his coupon for meeting expenses, & you delay that coupon by a month, from his pov its a default, from mkt pov that's a restructuring. 3. Strongly agree with the rest of your thesis ie. Greece & PIGS will default. Hyperinflation in US is virtual certainity. Dunno about US technical default - we'll end up doing that from an accounting standpoint, but then get creative about the nomenclature.

MaysonL 15y ago
Hyperinflation in US is virtual certainity. Anybody betting on this will go broke.