Economic Mournings

[IAmZon]

Many smart guys are a part of this group.  Obviously, great changes are underfoot economically speaking.  There is a saying that goes like this:  "The one that looks in the crystal ball must learn to eat glass."

Nevertheless ....

Anybody have an opinion on how travel to Ukraine and Russia will change over the next 6- 12 months economically and politically?

[BC]

Should be beneficial..

Western currencies increasing in value
Demand for business travel, hotels etc decreasing hopefully dropping those prices further.
Oil down, transportation costs down.

Some of this might be negated by higher inflation for other goods like foodstuffs etc.

But of course just guessing, and based on a stable income back home.

[kievstar]

I concur with BC and add more women will want to leave Ukraine, cannot speak about Russia.  Ukraine economy is a mess.  Country will be bankrupt unless they get a helping hand next year.  Maybe Russia helps them.

[IAmZon]

petro dollars becoming redefined too ... Russian may need help too.  we will see

[wxman]

At one point today the dollar was worth 5.9 hryvnia. 

http://www.reuters.com/article/rbssFinancialServicesAndRealEstateNews/idUSL870002320081008

[Makkin]

  Sterling and Eurogo to record lows as expected by the respected countries. Possibly the pound falls to 1.10 against the dollar and the Euro falls to .84 against the dollar. Historically or as a measure you can see the pound ahead of the the Euro at a rate of about 20% but recently the Euro has gained to a point of being worth more. The outlook for the Euro versus the pound should be significant soon or maybe not?
  Iceland has caused the latest and biggest problem and forced Britain to send in 50 billion pounds to secure Britsih accounts there as inflation as well as two of three major bank failures today have happened.

  In the long run it's gonna be okay but the short run or 12-18 months is gonna be drastic in many sectors. I predict losses for people who invest too strong in metals. Losses for those wo attempt to manipulate the markets. Finally my guess would be that eastern europe will come along and suffer greatly in the next four months.

Makkin
 

[wxman]

It doesn't help that the President of Ukraine has ordered new Parliamentary elections. Ukraine is in total disarray. Would only take a few rumors to cause a run on banks there.

http://www.cnn.com/2008/WORLD/europe/10/08/ukraine.election.ap/index.html

[IAmZon]

greed, fear, and confidence ... so much for 1 + 1 = 2.

What a house of cards.  economics is truly the dismal science.

Yes, I agree 4 months to 16 months of pain.  Beers and vodkas will go down in price dramatically in Ukraine and Russia.

I wonder, since their is really no real history for the free market to draw upon, how fragile things may become.  It is possible that we have just lived through a more historically significant 2 - 3 weeks than 9-11 brought us.  Not necessarily BAD - DOOM & GLOOM ... just the rough evolution of the global economy.

[Gator]

Specific to Ukraine, a man who can afford a few trips to Ukraine over the next 5 quarters will impress the impoverished UW as indeed being very clever.  So set aside your travel money now in short term AA or AAA muni bonds.

Not specific to Ukraine, yet very telling by one of the smartest minds on Wall Street:

http://www.pimco.com/LeftNav/Featured+Market+Commentary/IO/2008/Investment+Outlook+Gross+October+2008+Fear.htm


A Simpler Explanation

Once upon a time in a village, a man appeared and announced to the villagers that he would buy monkeys for $10 each. The villagers seeing that there were many monkeys around, went out to the forest, and started catching them.
 
The man bought thousands at $10 and as supply started to diminish, the 
villagers stopped their effort.  He further announced  that he would now buy at $20.  This renewed the efforts of the villagers and they started catching monkeys again.
 
Soon the supply diminished even further and people started going back  to their farms.  The offer increased to $25 each and the supply of monkeys became so little that it was an effort to even see a monkey, let alone catch it!
 
The man now announced that he would buy monkeys at $50!   However, since he had to go to the city on some business, his assistant would now buy on behalf of him.
 
In the absence of the man, the assistant told the villagers.  "Look at all these monkeys in the big cage that the man has collected. I will sell them to you at $35 and when the man returns from the city, you can sell them to him for $50 each."
 
The villagers rounded up all their savings and bought all the monkeys.  Then they never saw the man nor his assistant, only monkeys everywhere!

[kievstar]

People complain about Bush but is there really a better president in other countries?  Ukraine, Russia, EU???  When a country has to suspend there stock market that is a problem. 

[IAmZon]

The silver lining for me is

I like Monkeys

[ambach123]

There are dire predictions.

That the US stock market would lose 80% of its value from its peak; it has already lost about 40%.

That housing would lose 50% of its value over the next five years; making almost 80% of houses upside down.

That except the rich, the rest of the Americans would have a negative net worth.

These are dire predictions and probably would not come to pass.

Another news item that 80% of Americans are depressed because of economy.

I think we taught the rest of the world how to borrow and spend, the money now we and them can't pay back. Russia and Ukraine are worse off economically. They will revert to like they were in the late nineties. Russian stock market was closed this week; only sellers no buyers.

How life turns around a full circle.

It would certainly effect the MOB business, I am not sure how. Probably those who were in it ten years ago would have a better guess.

[kievstar]

High taxes are coming to USA with Obama.  Maybe a wealth tax which is taxed on your networth each year. 

[Makkin]

Hi,

  I'm optimistic at all times because planning and strategy is important.

   In our age in America many many people have there homes paid for and are not upside down by any means. The baby boomers have millions of members here and they have either paid off a lot and are at the end of a mortgage or they have been free and clear for years. The taxes on the home may be the real issue.
   Personally I'm still in my forties but my home has been paid for since 1993. Free and clear is what I have looked at over the years but not free and clear from the tax man. It pays to allocate your personal funds in a way that can protect you in most times and now is a good time for that.
   I see millions of people who should never of had a home loan move back into apartments and with the parents or family. Is that something they can live with? The price of food is still very good here and the prospects for many are still the same and waiting for the retards who started all this to be taken care of.
   America is doing well in many places and like Europeans we both will adjust to things and make ends meet because we are not third world countries but rather first world leaders. Europeans should be proud as well as determined to fight this thing in unison with other western powers and in the end the light will come out to greet us all.

Makkin

[Ronnie]

I'm reminded of the old adage that when America sneezes, the rest of the world catches a cold.

The current crisis is one of confidence.  As FDR rightly pointed out 'the only thing there is to fear, is fear itself'  In that context, the American nation is far and away the least pessimistic.  It's in their genes..remembering that our forebearers where of the sort who sold all they had (sometimes very little) to buy passage to America, optimistic they could work their way to a better life.  And so it has been and the backwater country populated by the world's forgotten and discarded souls, has built an economic powerhouse and a fortress against all storms.

The dollar is rising dramatically.  Why, is that?  Because the world knows that despite the problems America experiences from time to time, she survives and comes back stronger than before. 

No one wants to invest in Russia right now, not even the Russians.  Same can be said for Ukraine.  My wife's friends in Ukraine are near panic.   Yushenko is doing the right thing by dissolving parliament.  Not that Paliament has played a role in the current crisis..it hasn't.  But Yushenko must take action and give the Ukrainian population a feeling that something is being done that my improve the situation.  It's all a question of optimism vs. pessimism.  Pessimism is a killer.

As a footnote to the situation in Russia, my wife's friends and former neighbors report that Russian journalists are fleeing Russia and coming to Ukraine.  The say that Russia is returning to the days of Stalin where people are removed from their homes in the middle of the night never to be seen or heard from again.  Journalist who dare report on these events know they will be next so they are fleeing to other countries where they can report the truth.

[groovlstk]

Yushenko is doing the right thing by dissolving parliament.  Not that Paliament has played a role in the current crisis..it hasn't.  But Yushenko must take action and give the Ukrainian population a feeling that something is being done that my improve the situation.  It's all a question of optimism vs. pessimism.  Pessimism is a killer.

I'd guess that this - the umpteenth shakeup of a weak, corrupt, and ineffectual government - is going to inspire the faintest whiff of optimism in even .00000001% of the population of Ukraine.

I've never met people who are more pessimistic about their government than Ukrainian people - they are even more pessimistic than Russians, and that's saying something.

[Misha]

Maybe Russia helps them.

Ukraine had better hurry. The Russian media is reporting today that the Russian reserves of gold and foreign currency will last 110 business days to 6 months if Russian government spending continues at the present rate.

[ambach123]

I heard from my girl in Ukraine, she is depressed, she thinks her country is going in an abyss.

Only a few weeks ago when I met with her, she had no such feelings, actually she felt good about her country.

I am surprised at such a quick change.

[wxman]

Yuschenko is taking a big chance here. His party might not even get the 3% required to hold any seats in Parliament. A man with no allies in government and one who has control of the military can lead to an ugly situation.

[wxman]

Ukraine had better hurry. The Russian media is reporting today that the Russian reserves of gold and foreign currency will last 110 business days to 6 months if Russian government spending continues at the present rate.

Maybe even less since Russia is willing to lend $6 billion to Iceland which is now basically bankrupt. The Icelandic PM came out saying today that Iceland should not have been playing with the big boys. 

[Makkin]

  I was here about a year ago in a discussion with Mir about the drop of the dollar. He had to mention that in detail..lol I reminded him of the problems of Mr. Gordon Brown and how he sold the gold reserves at a loss and cost Britain about 50 billion pounds as it turned out. He wanted to state the obvious about our economy so I stated the obvious and predicted that a year from now...Was 2007 that the British economy would falter due to bad credit and spending. I warned of the Bailiff making rounds through the entire country. To my surprise he agreed with me so I knew he was well informed and complimented him on his knowledge. It's all here in the archives.
   
   The dollar is nothing more than a form of payment as is the pound and other forms of countries exchange process. I still believe strongly in the power of metal as we bought a nice amount at 10 dollars and watched it go to 20 dollars in about 5 months. I bailed at 15.60 as to lock in a profit. Last week and in the past few days it has fallen to 10.99 or so and is a good buy even at 14 dollars an ounce. If things look bad it's good and probably better to buy silver rather than gold because it's a workhorse precious metal and is largely used in industry. The Brits make hospital gowns laced with silver as they prevent(silver) disease as it's been proven. The gowns and such cost about 200 per set and they really work on the infection problems in the local hospitals. Gold is for the wealthy and countries but silver may once again be the actual money for many countries and the copper will follow along to make change. I would advise you to buy as it's very very very affordable and if you do the math you can buy massive amounts before the panic begins.

Makkin

[IAmZon]

Ok... regarding the Monkey Explanation on page one, it is interesting but misses the organics of what is really happening.  What is the fundamental intrinsic value of the monkey to the "users"....do they eat the monkey...do they keep the monkey as a pet....do they make clothing from the monkey....does the monkey work picking apples at a lowwer cost than people....
 
In other words...monkeys and cars and everything has a "realtive utility value"....which changes based on the interactions of all host of alternatives to monkeys (fueled by human emotions of greed vs fear amongst the users and providers).

There are huge corrective issues being applied by the market today.  It is a cold bath from the drunken perspective of bubble wealth.

Regarding the future, I will go out on a limb and suggest that we will see HUGE government intervention to make a significant recession less traumatic for the most amount of people. Thus making it longer, and leaving behind an greater governmental presence in "private markets."

I think it will be very interesting to see how the LEGACY of "America" will play out both in the US; but more around the world.  How will countries respond to the downturns?  Many of these countries are infants to the free market (or some variation thereof), these young free market leaning states will become tested.

These are interesting - and perhaps dangerous - times.

[Ronnie]

It is my belief that one of the fallacies prevalent in government regulators thinking is that bigger is better and brings benefits to consumers.

Companies and governments lose efficiency as they get bigger.  There is a point of diminishing returns that is reached early in the growth curve.  Companies who reach that point begin to buy out smaller competitors.  This practice should be stopped.

As to government, the American people need to insist on a balanced budget amendment to the constitution.

[Makkin]

  I don't think 700 billion from the US and 350 billion pounds from the UK along with other national currencies will help much due to the seriousness of the situation. When you figure that the problem runs well into the multi trillion area of debt then how is a few billion gonna do much?
  It may be that 2012 has found it's reason for our societies as it may take that long if and unless next week show some promise in the markets. I hope for the sake of the poor and those who get along with minimal standards have good luck and faith along with them because it's gonna be hard for them.
 
  When there is blood in the water it's time to purchase stocks as they say. Warren Buffet owned 15% of the worlds silver last year and sold out most of it. He made two or twenty fortunes and my guess is he will now be buying again. The price will go back to 20 and probably 30.

  Europe is gonna be hit harder than expected but so is the US.

Makkin

   

[ambach123]

We are in a world wide recession/ depression. There are no easy solutions and it would be with us for a long time. During this time most people would lose the value of the assets they had accumulated.

Probably Russia and Ukraine will suffer more than we would.

I am interested in knowing what if any effect it would have on MOB.