Toro! Or Others Seriously Keyed Into Economics

Discussion in 'Economy' started by Annie, Aug 20, 2011.

  1. Annie
    Offline

    Annie Diamond Member

    Joined:
    Nov 22, 2003
    Messages:
    50,847
    Thanks Received:
    4,644
    Trophy Points:
    1,790
    Ratings:
    +4,770
    Do you agree with this analysis? If so, what is the ultimate outcome?

    Real Private Investment Flat Vs. 1998 - Investors.com

     
  2. eots
    Offline

    eots no fly list

    Joined:
    Jan 6, 2007
    Messages:
    28,995
    Thanks Received:
    2,034
    Trophy Points:
    205
    Location:
    IN TH HEARTS AND MINDS OF FREE MEN
    Ratings:
    +2,606

    yes and the result will be this....

    [ame=http://www.youtube.com/watch?v=23SVHUPrUJ4]The Tell of Captain Walker - YouTube[/ame]
     
  3. Annie
    Offline

    Annie Diamond Member

    Joined:
    Nov 22, 2003
    Messages:
    50,847
    Thanks Received:
    4,644
    Trophy Points:
    1,790
    Ratings:
    +4,770
    No! You will not get this thrown into Conspiracy. Be Gone!
     
    • Thank You! Thank You! x 1
  4. Toro
    Offline

    Toro Diamond Member

    Joined:
    Sep 29, 2005
    Messages:
    50,786
    Thanks Received:
    11,059
    Trophy Points:
    2,030
    Location:
    The Big Bend via Riderville
    Ratings:
    +25,123
    It appears to the case.

    [​IMG]

    The problem is not that we don't have enough investment now. The problem is that we've had too much investment in the past. It's the main reason why we are in this mess today.

    We had two massive asset bubbles in the last 10 years, first the Tech Bubble, then the Housing Bubble. When we had investors going bananas over the Internet in the 90s, too much capital was diverted to the technology industry, or at least too much for the economy to handle at that time, and we went into a recession. Then, a few years later, people went bananas over housing prices, and we built too many homes. The long-term trend for new housing builds was about 1.2-1.3 million homes a year. Then, in the 00s, we began building 2 million homes a year, which was way too much. Inevitably, the housing bubble collapsed and now we are building 500,000 homes a year. We shouldn't be building any more homes until we rebalance supply and demand, which will occur in a year or two.

    So, yeah, a big reason why the economy is doing so poorly is because we are well below the long-term trend in investment. But this is common after we have collapsed from an asset bubble. During a bubble, we have a boom and build too much stuff. But eventually, the economy cannot sustain all the stuff we build and we stop building the stuff, then the economy collapses. This is why the economic recovery was one of the weakest on record after the Tech Bubble collapsed, and why the economy is so lousy now, given that we are still staggering from the Housing Bubble collapse. It was neither Bush's fault nor Obama's fault that the economy has been so bad over the past decade. If you study bubbles and the aftermath, this is what is supposed to happen. And what has to happen is that we have to clear out the excesses of supply and return to a more normal environment, which means below-trend investment for some time. Trying to sustain the level of investment just keeps pushing the can down the road and makes things worse.
     
    Last edited: Aug 20, 2011
  5. expat_panama
    Offline

    expat_panama Silver Member

    Joined:
    Apr 12, 2011
    Messages:
    2,461
    Thanks Received:
    252
    Trophy Points:
    98
    Ratings:
    +253
    It's in the article; the problem--
    --as well as the solution:
    Investor's Business Daily is usually spot on, but this piece screwed up with their bogus rant about "high household debt"; their Jed Graham is apparently not the brightest bulb in the light board. High household debt's been falling for several years now but we don't find that out from the Commerce Debt where Graham was looking. The Fed's in charge of monitoring household debt and they post it here: FRB: Statistics and Historical Data .

    Now you know more than they do.
     
  6. editec
    Offline

    editec Mr. Forgot-it-All

    Joined:
    Jun 5, 2008
    Messages:
    41,427
    Thanks Received:
    5,598
    Trophy Points:
    48
    Location:
    Maine
    Ratings:
    +5,618
    Two word answer to why business investments aren't being made in the USA.

    IM PORTS
    As long as capital can capture the US markets with imported goods made much more cheaply offshore, there is NO ENCENTIVE to invest in this nation.

    In fact, as long as we allow free traitorism to reign, that is a DISencentive to investing in the USA.


     
  7. KissMy
    Offline

    KissMy Free Breast Exam

    Joined:
    Oct 10, 2009
    Messages:
    12,080
    Thanks Received:
    2,145
    Trophy Points:
    255
    Location:
    In your head
    Ratings:
    +2,927
    The way to cure the IM PORT problem is to make the nation more efficient. We have to compete in the global market place & energy efficiency. Most of the idiots in power only pander to 2 groups. The entitlement thugs or the no tax cronies. Progressives are just entitlement thugs who are progressive in name only.

    Toro's & expat_panama's assessment of the article are good. Bottom line is we just went through 2 massive bubbles & only recession, deflation & time will fix it. Good government could have played a role in leapfrogging us over the recession by utilizing cheap idle labor to the countries advantage, but once again it screwed up. Bad government policy caused the bubbles so why should we think it could fix them.
     
  8. Truthmatters
    Offline

    Truthmatters BANNED

    Joined:
    May 10, 2007
    Messages:
    80,182
    Thanks Received:
    2,223
    Trophy Points:
    0
    Ratings:
    +2,233
    The housing Glut could have been avoided.

    It was instead encouraged to allow profits to continue in spite of the fact that we were headed for a crash.

    When the economy is kept more stable the middle class builds.

    When the economy is allowed to have booms and bust the wealthy reconcentrate the wealth.

    Its why we have not seen the historic boom and bust cycle the country historically had before glass steagal was in place.

    Now without glass steagal this is what we will have, a return to a boom bust society.
     
  9. Sallow
    Offline

    Sallow The Big Bad Wolf. Supporting Member

    Joined:
    Oct 4, 2010
    Messages:
    56,535
    Thanks Received:
    6,132
    Trophy Points:
    1,840
    Location:
    New York City
    Ratings:
    +7,394
    Well if you are looking at the "Tech bubble" sales of hardware were sluggish for a bit because so many dot com companies went bust..and their second hand gear was available at low cost. That's changed and with the advent of electronic trading..which is high speed, companies like Cisco and Juniper went into overtime to produce hardware and solutions to meet those challenges. And corporations are now in the process of purchasing to upgrade. I'm sure similar things are going on in other sectors, companies like Caterpillar were doing well. The rest of it is cheap money. Corporations can take out loans and either buy back stock or let it sit in interest bearing accounts.

    I'm also not sure if this is a "kick the can" down the road situation. And I'm reasonably sure many sectors are holding back investments because they want regulations eliminated.
     
  10. CrusaderFrank
    Offline

    CrusaderFrank Diamond Member

    Joined:
    May 20, 2009
    Messages:
    81,269
    Thanks Received:
    14,921
    Trophy Points:
    2,210
    Ratings:
    +37,078
    [ame=http://www.youtube.com/watch?v=LTbjcKZzrmM]Steve Wynn Goes On Epic Anti-Obama Rant On Company Conference Call - YouTube[/ame]
     

Share This Page