SERVING THE QUANTITATIVE FINANCE COMMUNITY

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frenchX
Topic Author
Posts: 5911
Joined: March 29th, 2010, 6:54 pm

Double dip or not ?

September 5th, 2011, 5:20 pm

Fellow Wilmotters,that's the question of today. Do you believe that there will be a double dip scheme in a close future ? 6 analysts on 10 believe in a global recession occuring in the next 18 months. Some people in Europe says that the quantitative easing policiy developped by the Fed is just a push forward into a double dip scheme. So are we all screwed or is there a tiny little hope for the future ?
 
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Traden4Alpha
Posts: 23951
Joined: September 20th, 2002, 8:30 pm

Double dip or not ?

September 5th, 2011, 8:10 pm

"Screwed" seems like too strong a word because the global economy has always had cycles of ups and downs. A double dip seems extremely likely unless the Germans (and French) decide to donate all their wealth to prop-up the rest of the EU. And even if the rich nations of Europe try to rescue the EU, it could still go poorly because there's no one left to bail out the bailouters.Keynesian stimulus works but only if the system starts in a low-debt condition such that the borrowed money isn't seen as a growth-killing burden.
 
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Anthis
Posts: 4313
Joined: October 22nd, 2001, 10:06 am

Double dip or not ?

September 6th, 2011, 9:34 pm

With USD/EUR persistently above 1.4 over the last couple of years with so many adverse events occured in the meantime, eg EU debt crisis at its peak or so, do you really believe in such doom scenaria? Is the most voluminus, liquid, and efficient asset market wrong?I just wonder how many bucks would be buying one euro now should these adverse events hadnt occure.
 
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exCBOE
Posts: 80
Joined: May 19th, 2010, 9:48 pm

Double dip or not ?

September 7th, 2011, 4:00 am

I think the answer to the question of imminent recession requires the valuation (or pricing?) of a derivative security. If Obama is re-elected, there will be seven lean years. If Palin is elected, there will be seven fat years. Someone else, somewhere in between, kind of like a spread. Too bad there is no Joseph to prophesy for us.
 
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gardener3
Posts: 1496
Joined: April 5th, 2004, 3:25 pm

Double dip or not ?

September 7th, 2011, 1:20 pm

The standard indicators point to one: zero to tiny growth in payrolls, less then 2% gdp growth, widening of corp spreads, flattening of the treasury curve, stock mkt correction, dcelining consumer confidence. But these may also just reflect the loss of confidence in the congress and the white house after the debt ceiling debacle.
 
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exCBOE
Posts: 80
Joined: May 19th, 2010, 9:48 pm

Double dip or not ?

September 7th, 2011, 4:45 pm

Are these like the indicators that do such a bang-up job predicting the stock market? Just sayin'...the 2012 election seems to trump all other indicators.
 
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Traden4Alpha
Posts: 23951
Joined: September 20th, 2002, 8:30 pm

Double dip or not ?

September 7th, 2011, 5:02 pm

I doubt the 2012 election will affect the U.S. economy other than as a blip in the volatility. Neither Obama nor Palin have a magic wand that can bless (or curse) the economy. Neither can solve the partisan impasse in which both parties seem equally stupid and equally intent on running the country into the ground for short-term political gain. Neither Obama nor Palin can solve the EU's debt crisis or the global impacts of that on banks, currencies, and economic activity.
 
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exCBOE
Posts: 80
Joined: May 19th, 2010, 9:48 pm

Double dip or not ?

September 7th, 2011, 6:03 pm

Don't forget the shale. She loves it. Obama hates it. We can frack our way back to prosperity. Europe is probably done. Stick a fork in it. Too old, too socialist, too smug.
 
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gardener3
Posts: 1496
Joined: April 5th, 2004, 3:25 pm

Double dip or not ?

September 7th, 2011, 6:45 pm

QuoteOriginally posted by: exCBOEAre these like the indicators that do such a bang-up job predicting the stock market? Just sayin'...the 2012 election seems to trump all other indicators.Indicators are not predictors, and the economy is not the stock market. We may very well be in a recession, we won't know for another quarter or two. There are certain things that happen always and only during a recession. They are descriptive not predictive.
 
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gardener3
Posts: 1496
Joined: April 5th, 2004, 3:25 pm

Double dip or not ?

September 7th, 2011, 6:49 pm

QuoteOriginally posted by: exCBOEDon't forget the shale. She loves it. Obama hates it. We can frack our way back to prosperity. Europe is probably done. Stick a fork in it. Too old, too socialist, too smug.I don't think many people know the % of S&P 500 revenues that come from Europe. Otherwise, they may be a bit more worried and take the death of europe a bit more seriously
 
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frenchX
Topic Author
Posts: 5911
Joined: March 29th, 2010, 6:54 pm

Double dip or not ?

September 7th, 2011, 7:16 pm

US is at a kind of economic war with Europe by falsely shouting in the media and in the market :" LOOK THEY ARE DEAD, LOOK AT THEM COLLAPSING , MOUHHAHAHA! (so you won't have a closer look at us ....) ".That's really funny. I'm sorry to say to you that WE (european) are almost in the same shit as YOU (americans). I remember an american article more than one year and half ago at the very beginning of the Greek crisis that the EUrozone will collapse, that the common currency will die, that the geopolitical union will blow in Europe, that Germany will return to Deutsch mark and that there will be WWIII in the old continent again.Well in Hollywood maybe but at the moment it is VERY unlikely in the real world. It's just another speculative attack by some irrational panic traders (hence 99,9999% of the market ). In the VERY WORST CASE scenario,Eurozone collapse --> US and UK collapse --> Japan collapses-->BRIC collapse --> We are all fucked !The only ressource would be in Africa (no money before and no money after ...) Remember in Hell to say thanks to those economists who praised "liberal capitalism, financial deregulation and macroeconomic globalization".
Last edited by frenchX on September 6th, 2011, 10:00 pm, edited 1 time in total.
 
User avatar
exCBOE
Posts: 80
Joined: May 19th, 2010, 9:48 pm

Double dip or not ?

September 7th, 2011, 8:04 pm

QuoteOriginally posted by: gardener3QuoteOriginally posted by: exCBOEAre these like the indicators that do such a bang-up job predicting the stock market? Just sayin'...the 2012 election seems to trump all other indicators.Indicators are not predictors, and the economy is not the stock market. We may very well be in a recession, we won't know for another quarter or two. There are certain things that happen always and only during a recession. They are descriptive not predictive."always and only"....like what? high unemployment? low self esteem? left wing fantasizing?...no...those can happen in a boom too. Where is the evidence that economists are better than groundhogs at predicting anything? Or even describing anything accurately?
 
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Traden4Alpha
Posts: 23951
Joined: September 20th, 2002, 8:30 pm

Double dip or not ?

September 7th, 2011, 8:08 pm

I can't see how drill-baby-drill will make much difference to the US economy. Even the most optimistic high-end estimates for reserves such as Barnett Shale mean the entire reserve isn't big enough to pay for one month of the current government deficit (or 3 days of GDP). Add in all the other sources of recoverable reserves and an agressive recovery process and maybe the U.S. would get a one-time bump to the GDP of few 0.1%. People talk about all the decades of supply in these reserves, which is nice for U.S. energy security, but the total economic value is quite small because the total energy industry is small relative the GDP.
 
User avatar
exCBOE
Posts: 80
Joined: May 19th, 2010, 9:48 pm

Double dip or not ?

September 7th, 2011, 8:13 pm

QuoteOriginally posted by: gardener3QuoteOriginally posted by: exCBOEDon't forget the shale. She loves it. Obama hates it. We can frack our way back to prosperity. Europe is probably done. Stick a fork in it. Too old, too socialist, too smug.I don't think many people know the % of S&P 500 revenues that come from Europe. Otherwise, they may be a bit more worried and take the death of europe a bit more seriously All Americans take it seriously. We know who will end up paying the tab. But really seriously, not being burdened with outdated economic theories, or environmental fantasies, I'm actually optimistic about the old world. Not even the dysfunctional intelligentsia will be able to convince ordinary people to suffer in order to refrain from using the hydrocarbon wealth beneath their feet. On the other hand, it will be a race between the producers and the parasites. So far the p's are winning.
 
User avatar
exCBOE
Posts: 80
Joined: May 19th, 2010, 9:48 pm

Double dip or not ?

September 7th, 2011, 8:28 pm

QuoteOriginally posted by: Traden4AlphaI can't see how drill-baby-drill will make much difference to the US economy. Even the most optimistic high-end estimates for reserves such as Barnett Shale mean the entire reserve isn't big enough to pay for one month of the current government deficit (or 3 days of GDP). Add in all the other sources of recoverable reserves and an agressive recovery process and maybe the U.S. would get a one-time bump to the GDP of few 0.1%. People talk about all the decades of supply in these reserves, which is nice for U.S. energy security, but the total economic value is quite small because the total energy industry is small relative the GDP.OK You invest in gold; I'll invest in hydrocarbon energy. We can meet in hell in a century to see who was right.The North American supply of hydrocarbon reserves may be as high as 19.23 trillion barrels oil equivalent. Israel alone probably has another 11.46 trillion. More than the net worth of the rest of the world combined at current prices. How ironic it will be (observing from hell) to see Arabs and Iranians coming to the great satan and the little satan for handouts, once the Saudi oilfields dry up. One silver lining. Maybe they will be too busy surviving to keep killing their gay populations.But you maintain that there is under $100B in economic value there (maybe even annually). Hey. We're only 5 orders of magnitude apart. Surely we can compromise.
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