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US faces lost decade

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Re: US faces lost decade

Postby MrBill » Fri 29 Feb 2008, 12:22:35

GDP is normally shown in inflation-adjusted terms. I do not know why The Economist decided to use nominal GDP? Due to the distortion of comparing varying levels of domestic inflation/deflation? I am unsure? Sorry.

$this->bbcode_second_pass_quote('', 'L')esser Known Data Unadjusted for Inflation
Though many prominent economic series such as gross domestic product (GDP) and exports are adjusted for inflation, some less prominent indicators are not. A simple methodology can be used to deflate any nominal data series to real values.


Source: Deflating Nominal Values to Real Values

As I said, averages often hide more than they reveal. I did not say productivity did not rise, but there is a lot of under-employed labor in Japan.

And in any case one would expect rising labor productivity during recessions as firms put off hiring new staff and expect existing staff to work longer and harder for the same or less. Mandatory non-paid over-time is standard in many Japanese companies.

Did you read the link to The Economist article?
$this->bbcode_second_pass_quote('', 'Y')et once more there is talk of Japan passing. The stockmarket has fallen alarmingly since last summer, and has been in open rout for much of 2008 (see chart). Measured by the Nikkei 225 share index, Japanese shares are 27% below last year's July high: deep bear-market territory. Share prices are now back to their levels of September 2005—not even half where they stood 20 years ago. In January foreign investors pulled record amounts out of the Japanese stockmarket. Ask any money manager: Japan still has an amazing ability to disappoint.


Source:
Why Japan keeps failing

Here is another.

$this->bbcode_second_pass_quote('', 'I')n the first few years of Japan's post-bubble period, lingering hubris from the halcyon days led to unwillingness to believe that the bad loan problem wouldn't simply go away. The government and the banks too were optimistic the economy would recover, and prosperity would naturally solve the bad loan problem.

Instead, the problem ballooned as asset prices plummeted. Land, which was used as collateral for many of the loans, spiraled downward for more than a decade. Everyone, from blue-chip companies to housewives, struggled to pay off debt and repair their balance sheets, and both corporate capital expenditures and consumer spending dwindled away.

"This is what I call a balance-sheet recession, when companies are minimizing debt instead of maximizing profits," said Richard Koo, chief economist at Nomura Research Institute, the research arm of Nomura Securities.


Source: U.S. banks would do well to consider lessons from Japan's 'Lost Decade'

The rest of my analysis I stand behind. I may be wrong, but I am at least in good company! ; - )
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Re: US faces lost decade

Postby mkwin » Fri 29 Feb 2008, 14:06:24

$this->bbcode_second_pass_quote('', 'I')n Russia the standard of living actually allowed more people to live than the current capitalist mess, thanks in large part to "shock therapy"


How many Russians or east Europeans do you know? I have met many while working in the City in London and all speak nothing but negatively towards the communist era. The Russian economy is booming. The middle class in Russia, and in other former eastern block countries, is growing substantially for the first time.

The same point is true for the Chinese. The Chinese middle class is also growing rapidly. They have nice apartment, fridges, cooking appliances, good quality medical coverage, mobile phones, computers, internet access, televisions, and savings. You might deride these things but I am sure you enjoy them yourself. If you want to live a in a basic way that is fine but do not idealize a very tough lifestyle and deride the luxury you yourself enjoy. If you are so in awe of this way of life move to Bangladesh.

$this->bbcode_second_pass_quote('', 'W')hat I was pointing out was that centrally planned economies can produce growth and massive increase in measurable standards of living e.g. rail, housing, electricity, phones, education, medical, other durable goods.


In regards to Russia historically, you seem to believe communism allowed Russia to develop. Russia was always a great world power even in the 18th and 19th century. If it had not gone down the communist route it would have industrialized in the same way France, Germany or Sweden or any other relatively open country has done. It would also probably have been far richer as communism is inefficient because it distorts the price mechanism, which leads to an inefficient allocation of resources. Russia would also have had a far greater population as Stalin killed 20-30 million with his forced industrialization.

There has never been an argument more decisively won that the one between free market and centrally planned economies. The only argument that remains is the extent of government intervention in market failure. That’s were the likes of the US and France differ but the rest is a mute point.

$this->bbcode_second_pass_quote('', 'T')ake care hope you're not burdened with too much debt.


Far from it. In fact my gold long positions and SPX500 short position are already up about a $150k so far this year and the party is just beginning. I guess understanding economics is not just useful for arguing with people on internet forums :)
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Re: US faces lost decade

Postby mkwin » Fri 29 Feb 2008, 14:11:03

$this->bbcode_second_pass_quote('', '4')00 million people lifted out of extreme poverty? Thats an interesting statement. I guess if you can grow your own crops, live a low energy lifestyle, have clothing and shelter it must be "extreme" poverty.



FYI


$this->bbcode_second_pass_quote('', 'E')xtreme poverty is the most severe state of poverty, where people cannot meet basic needs for survival, such as food, water, clothing, shelter, sanitation, education and health care.[1] To determine the number of extreme poor around the world, the World Bank characterizes extreme poverty as living on US $1 or less per day, and estimates that 1.1 billion people currently live under these conditions. This $1 a day figure has been adjusted for purchasing power parity,[2] which attempts to eliminate differences in costs of goods and services between countries to present a more meaningful comparison but has not been adjusted for inflation for over 15 years, leaving a useful measure in the early 1990s as almost worthless. Eradication of extreme poverty and hunger by 2015 is a Millennium Development Goal. Economists and activists consider epidemic diseases (AIDS, malaria, tuberculosis) as crucial factors in and consequences of extreme poverty.

Extreme poverty is most common in least developed countries, especially parts of Africa, Asia, Central America, etc. The proportion of people in extreme poverty fell from 59 to 19 percent during the 20th century and is now the lowest in history.


http://en.wikipedia.org/wiki/Extreme_poverty
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Re: US faces lost decade

Postby Concerned » Fri 29 Feb 2008, 19:31:52

$this->bbcode_second_pass_quote('MrBill', 'C')oncerned, I want to defend a social-democracy with a free, open and transparent market economy as being the best of all solutions in terms of wealth creation, raising living standards and giving people a free choice.


Agree. I think www.ied.org has a blueprint for a much more inclusive economic structure. One that would actually trickle down like it's supposed to in theory not just enrich the few.

As I said they still don't mention unending growth population or economic as a problem.

$this->bbcode_second_pass_quote('', '
')

My feeling is that centrally planned economies are simply not very creative.

Correct the structure is not there for people to participate neither is there any incentive.

By incentive I don't mean the current "winner takes all" system of capitalism in America which I think is equally destructive.

I don't have any problem with someone owning more than myself if I perceive it as fair reward for effort. Currently what I witness is gross overcompensation of a select minority.

$this->bbcode_second_pass_quote('', '
')And for ideological reasons sensible solutions may be ignored.

Agreed. The deep ploughing episode that destroyed harvests in Stalinst Russia and the so called "great leap forward" are two striking examples.

It has to be said and has been pointed out by great thinkers like Noam Chomsky that corporations are totalitarian institutions.

However the difference in a somewhat open and market based economy if such an institution screws up (and there are many examples Enron, Worldcom etc...) it does not take the whole country down with them.
$this->bbcode_second_pass_quote('', '
')
No system is perfect, but I would sooner make my own decisions rather than have someone make them for me in their best interest, not mine.


I have never argued that any one system is "perfect". To my mind that is probably impossible. Definitions would be difficult enough.

There are many tens of thousands of decisions in even our market economy that are made for us by authorities.

From how fast you can drive on a straight stretch of road, to how thick the water pipes in your house have to be.

We have an amount of freedom to work within the system and as long as we can vote much to the chagrin of many a pundit (tyranny of the masses gets invoked) there is scope to work for change.

Finally just to put peoples mine at ease. I am not in favor of totalitarian communism being instituted as a form of government.

I think our current GLOBAL economic system needs serious reform and re thinking. How to disperse some of that 80% of wealth held in 2% of the population. Through natural market forces as it would if markets and structure did not monopolize power and wealth.

Lastly if humanity does not talk about the population issue then no system in the world, no reform, no "ism" will give us any chance. This is the biggest change we need to undertake collectively as a species.

We have zero chance in my view, zero. Which is why I'm a doomer and enjoying every moment. Yes even on PO.com I love this forum.

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Re: US faces lost decade

Postby MrBill » Fri 29 Feb 2008, 19:47:04

Concerned, this is a forum for different ideas. No problem. Peace! ; - ))
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Re: US faces lost decade

Postby Concerned » Fri 29 Feb 2008, 20:08:57

$this->bbcode_second_pass_quote('mkwin', '')$this->bbcode_second_pass_quote('', 'I')n Russia the standard of living actually allowed more people to live than the current capitalist mess, thanks in large part to "shock therapy"


How many Russians or east Europeans do you know? I have met many while working in the City in London and all speak nothing but negatively towards the communist era. The Russian economy is booming. The middle class in Russia, and in other former eastern block countries, is growing substantially for the first time.

How many people in extreme poverty do you know? Do you think the Russians you meet in London are the ones participating in the shopping center binge or the multitudes missing out?
$this->bbcode_second_pass_quote('', '
')The same point is true for the Chinese. The Chinese middle class is also growing rapidly. They have nice apartment, fridges, cooking appliances, good quality medical coverage, mobile phones, computers, internet access, televisions, and savings. You might deride these things but I am sure you enjoy them yourself. If you want to live a in a basic way that is fine but do not idealize a very tough lifestyle and deride the luxury you yourself enjoy. If you are so in awe of this way of life move to Bangladesh.

Why would I want to go to Bangladesh, just because I question the wisdom and sustainability of destroying the ability of a nations, soils, rivers, air, aquifers to sustain your population for short term trinkets does not mean I want to move to Bangladesh.

Just because I believe that industrialization and our current high energy way of life will come to a devastating ending does not mean I want to live in a cave.

Are you being purposefully obtuse or if someone challenges your view of the world you make irrational thought leaps?
$this->bbcode_second_pass_quote('', '
')
$this->bbcode_second_pass_quote('', 'W')hat I was pointing out was that centrally planned economies can produce growth and massive increase in measurable standards of living e.g. rail, housing, electricity, phones, education, medical, other durable goods.


In regards to Russia historically, you seem to believe communism allowed Russia to develop.

Look. I am not saying that communism was the only thing that allowed Russia to develop. (with creative limits as expressed by MrBill) I am just pointing out to you that totalatarian communism raised millions of people out of extreme poverty in Russia.

Im not arguing that capitalism for example would not have been able to do the same. Although capitalism alone is no sure thing as you can check many a capitalist hell hole starting in south America.
$this->bbcode_second_pass_quote('', '
') Russia was always a great world power even in the 18th and 19th century. If it had not gone down the communist route it would have industrialized in the same way France, Germany or Sweden or any other relatively open country has done.

It may have and it may not. Germany might have won WWII if <insert hypothetical scenario>
$this->bbcode_second_pass_quote('', '
')It would also probably have been far richer as communism is inefficient because it distorts the price mechanism, which leads to an inefficient allocation of resources.

So how did so much capital get mis allocated in late 80's Japan, 1997-98 Asian tigers, Indonesias Suharto, dot com's, US & UK housing.

I think you are seriously overestimating the efficiency of the current system of semi free market capitalism.
$this->bbcode_second_pass_quote('', '
')Russia would also have had a far greater population as Stalin killed 20-30 million with his forced industrialization.

I'm sure "shock therapy" capitalism would just had to have killed more than it currently has then.
$this->bbcode_second_pass_quote('', '
')
There has never been an argument more decisively won that the one between free market and centrally planned economies.

I don't think so. The US share of government in the economy is currently 43%. So 43% of the US economy is centrally planned and growing. So I suggest taking the blinkers off step away from the waving crowds and confetti and have a look at whats really going on.
$this->bbcode_second_pass_quote('', '
')The only argument that remains is the extent of government intervention in market failure. That’s were the likes of the US and France differ but the rest is a mute point.

Believe me there is much more argument about our current economy than the extent of government intervention.
$this->bbcode_second_pass_quote('', '
')Far from it. In fact my gold long positions and SPX500 short position are already up about a $150k so far this year and the party is just beginning. I guess understanding economics is not just useful for arguing with people on internet forums :)
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Re: US faces lost decade

Postby mkwin » Fri 29 Feb 2008, 22:09:05

$this->bbcode_second_pass_quote('', 'A')re you being purposefully obtuse or if someone challenges your view of the world you make irrational thought leaps?


There was nothing irrational about my point. You said, and I quote;

I$this->bbcode_second_pass_quote('', ' ')guess if you can grow your own crops, live a low energy lifestyle, have clothing and shelter it must be "extreme" poverty.


You were idealising extreme poverty. I do not know what it is like to live in China. Personally I would not want to live there. My understand is from books I have read about the socio-demographic and economic changes over there and people I have met.

My point was not about your point about sustainability; it was about your dismissive attitude to the wealth gains of the Chinese and other developing country middle classes. I quote:

$this->bbcode_second_pass_quote('', 'w')orking for a few dollars a day so you can watch MTV or buy an iPod


I agree that the industrialisation of the developing world is worrying but how can we sit here in our quarter acre homes and say to the Chinese or the Indians you cannot have a good quality of life.

$this->bbcode_second_pass_quote('', 'a')m just pointing out to you that totalatarian communism raised millions of people out of extreme poverty in Russia.


I was just saying the capitalism did exactly the same in every capitalist country in the world. Just like it is doing in Eastern Europe since the fall of the berlin wall.

You keep making the point that South America is an example of the failure of capitalism; and it is a difficult picture. I would agree that many right wing countries are hellholes but they were often plutocracies enforced by the US to control the leftist leanings of the continent. I deplore these actions but they are specific problems. In regards to economic growth, part of the problem with investment in South America is these left wing tendencies. Why would a company invest in Bolivia when there is every chance of being hit with very high taxes and possibly loosing your assets. I can also point to an example of a growing success in the form of Brazil.

$this->bbcode_second_pass_quote('', 'S')o how did so much capital get mis allocated in late 80's Japan, 1997-98 Asian tigers, Indonesias Suharto, dot com's, US & UK housing.

Bubbles are an example of periods of mis-allocation but they do not stay mis-allocated for long; they always pop. In a centrally planned system, there is always an inefficient allocation because it is the nature of the system.

$this->bbcode_second_pass_quote('', 'I') don't think so. The US share of government in the economy is currently 43%. So 43% of the US economy is centrally planned and growing.

The government is always going to make up a significant portion of the economy because many goods and services cannot be provided adequately by the free market. This government intervention to correct market failure does not constitute a centrally planned economy as in the communist sense. It would be rediculas to attempt to let the private sector manage policing, fire services, infrastructure investment, defense etc. Producing steel and computer chips, however? Absolutely; because it will be more efficient as the price mechanism will dictate the level of supply and consumption.

$this->bbcode_second_pass_quote('', 'S')o I suggest taking the blinkers off step away from the waving crowds and confetti and have a look at whats really going on.

Please don't be patronizing, we may have different opinions but I am not critising you personally. I have a large amount of academic and business experience in economic and investment related fields and have a pretty good handle on what is going in on. In fact I was warning my employers about the risk of the US housing market dragging the world economy into recession in the summer of 2005. Sharing and debating ideas is a process of leaning that is rewarding; I do not do it to 'get one over' on the other guy.

The bottom line is I agree with you to a certain extent; capitalism is not perfect in its current state. It fails to take into consideration external costs adequately in the form of environmental damage and I sincerely hope a global carbon tax system is implemented as a starting point.
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Re: US faces lost decade

Postby Concerned » Sat 01 Mar 2008, 05:50:42

$this->bbcode_second_pass_quote('mkwin', '
')Please don't be patronizing, we may have different opinions but I am not critising you personally. I have a large amount of academic and business experience in economic and investment related fields and have a pretty good handle on what is going in on.


Then I shall be overt and blunt.

You are a nothing more than a ideologue a buffoon of feeble mind.

You are no intellect, you garner no new insight you detract rather than add to a discourse.

In short dialog with you is a waste of time.

Your credentials for want of a better word remind me of a joke on South Park. What do you call an American (for example mkwin) with two degrees.

A: a stupid American (a stupid mkwin)

hahahahahahaha

youi're a loser buddy 150K in gold longs and all ;) :D
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Re: US faces lost decade

Postby mkwin » Sat 01 Mar 2008, 08:49:51

$this->bbcode_second_pass_quote('Concerned', '
')
Then I shall be overt and blunt.

You are a nothing more than a ideologue a buffoon of feeble mind.

You are no intellect, you garner no new insight you detract rather than add to a discourse.

In short dialog with you is a waste of time.

Your credentials for want of a better word remind me of a joke on South Park. What do you call an American (for example mkwin) with two degrees.

A: a stupid American (a stupid mkwin)

hahahahahahaha

youi're a loser buddy 150K in gold longs and all ;) :D


LOL .....Please Concerned you're hurting my feelings. A childish outburst is a perfect way to crown a failing argument.

I am at a loss to find any 'new insight' you bring to any discussion I have been involved in here. All you bring is empty rhetoric based on an incomplete understanding of the subject and that huge chip on your shoulder
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Re: US faces lost decade

Postby Waterthrush » Sat 01 Mar 2008, 10:51:28

Mr. Bill, I'm way below your league in evaluating economic impacts of various scenarios, but I want to challenge the common notion that the aging US population (or other aging populations) by themselves spell some kind of doom.

Children and young people are not a constant factor across different types of economies. An agricultural economy seems to absorb them more effortlessly than a post-industrial economy.

Couldn't a case be made that a large scale decline in population might not be a very painful economic event? The infrastructure of schools and childcare is at least as expensive as the infrastructure for the elderly (not sure how to factor in medicines, but since so many children are medicated these days, maybe it's a wash!). And there is a cost to keeping young people out of the economy - very clearly seen in the US where the standard 4 year college degree scarcely exists, and years of further higher education seem to stretch before 20-year-olds. Or, the now-record prison population. Although I don't think that keeping these young men out of the job market is the primary reason they are in prison, don't we often hear that lack of jobs is one major contributing factor to their presence there?

The public bears most of these costs and would benefit if they declined. Look at one of my favorite bugaboos, school athletics. Imagine the benefits to the public coffers if those costs could be halved.

So I'm not so sure that it would be so very costly to have an older population with fewer workers, but all those workers at full employment. It's a given that many US boomers will be working for an additional 5-10 years, so that draw upon social security will be put off for a decade. There will be an oscillation between boomers trying to hang on and younger workers taking their place, but the smaller numbers of the younger workers will mean, I hope, that employment levels will be maintained and perhaps increased, and that underemplyment will lessen as older boomers take those retail jobs while younger workers move into full time jobs.

And, if one thinks about the greater cost of all commodities as peak oil proceeds, a falling population would surely be a benefit to a nation.

I read that Europe is moving back towards full employment of at least its native citizens (not the immigrants at this point) - I don't have a citation, so I may be wrong there.

I just want people to think outside of the box and not just conclude that an aging population is some kind of economic disaster. It's been pointed out that Japan's aging citizens have not experienced much of a fall in their standard of living. And they're still saving! That makes me feel very hopeful!
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Re: US faces lost decade

Postby LoneSnark » Sat 01 Mar 2008, 13:33:19

$this->bbcode_second_pass_quote('', 'I') don't think so. The US share of government in the economy is currently 43%. So 43% of the US economy is centrally planned and growing.

Not at all, this is a common misconception. The US Government does not plan any production, it almost always buys what it needs from the market economy. For example, a large percentage of that 43% was given to social security recipients which then spent it as they wished (houses in florida, casino's in Las Vegas, etc). Even the military buys what it wants from private corporations, the Abrams tank is manufactured by General Dynamics and then sold to the government on contract. I do not know the figure, but the only actual production that is done through command and control would be some electricity production through the TVA, the parts of the post office that have not already been outsourced to private firms, AMTRAK, and top-secret stuff done by the NSA and CIA.
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Re: US faces lost decade

Postby cube » Sat 01 Mar 2008, 15:25:35

$this->bbcode_second_pass_quote('LoneSnark', '')$this->bbcode_second_pass_quote('', 'I') don't think so. The US share of government in the economy is currently 43%. So 43% of the US economy is centrally planned and growing.

Not at all, this is a common misconception. The US Government does not plan any production, it almost always buys what it needs from the market economy. For example, a large percentage of that 43% was given to social security recipients which then spent it as they wished (houses in florida, casino's in Las Vegas, etc). Even the military buys what it wants from private corporations, the Abrams tank is manufactured by General Dynamics and then sold to the government on contract. I do not know the figure, but the only actual production that is done through command and control would be some electricity production through the TVA, the parts of the post office that have not already been outsourced to private firms, AMTRAK, and top-secret stuff done by the NSA and CIA.
hell must of frozen over, I actually agree with LoneSnark for once. MOST of government expenditures actually bleed it's way into private hands. For example private contractors build freeways, Uncle Sam pays them. This is why it's next to impossible to "cut" the budget. The US economy is not centrally planned --> it more resembles a giant income redistribution program where everybody tries to lobby the government to steal someone else's money (taxes) for their own benefit (subsidies).

It is a collection of decentralized chaotic and opposing forces and NOT some centrally planned system. France would be a better example of a centrally planned system. :wink:
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Re: US faces lost decade

Postby Concerned » Sat 01 Mar 2008, 17:16:45

$this->bbcode_second_pass_quote('mkwin', '
')LOL .....Please Concerned you're hurting my feelings. A childish outburst is a perfect way to crown a failing argument.

I am at a loss to find any 'new insight' you bring to any discussion I have been involved in here. All you bring is empty rhetoric based on an incomplete understanding of the subject and that huge chip on your shoulder


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Re: US faces lost decade

Postby Concerned » Sat 01 Mar 2008, 17:26:18

$this->bbcode_second_pass_quote('LoneSnark', '')$this->bbcode_second_pass_quote('', 'I') don't think so. The US share of government in the economy is currently 43%. So 43% of the US economy is centrally planned and growing.

Not at all, this is a common misconception. The US Government does not plan any production, it almost always buys what it needs from the market economy. For example, a large percentage of that 43% was given to social security recipients which then spent it as they wished (houses in florida, casino's in Las Vegas, etc). Even the military buys what it wants from private corporations, the Abrams tank is manufactured by General Dynamics and then sold to the government on contract. I do not know the figure, but the only actual production that is done through command and control would be some electricity production through the TVA, the parts of the post office that have not already been outsourced to private firms, AMTRAK, and top-secret stuff done by the NSA and CIA.


The US govt plans and allocates 43% of capital as opposed to the "free market" being in charge of that allocation. It's a growing centrally planned economy.

Why should the government be in charge of allocating so much capital when the free market could do such a better job?

Isn't that the whole point of a free market that in can funnel money to where it's most productive?
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Re: US faces lost decade

Postby LoneSnark » Sat 01 Mar 2008, 18:11:54

Concerned, let me introduce you to Congress and the economics of Government. It does not matter if the money would be better spent if it was left in the hands of individuals; what matters is what bills you can get through Congress. And to politicians, which control which bills get passed, hiring a contractor to build a bridge to no where or a tea-cup museum with your name on it sounds better than a puny tax cut which no one will notice. It is distributed costs and concentrated benefits.

I am surprised to know that you are alive today and yet were unaware of how Government works. That 43% is the most politicians felt they could take without getting in trouble for it.
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Re: US faces lost decade

Postby mkwin » Sat 01 Mar 2008, 19:38:58

$this->bbcode_second_pass_quote('', 'W')hy should the government be in charge of allocating so much capital when the free market could do such a better job?


Market failure.

$this->bbcode_second_pass_quote('', 'M')arket failure is a term used by economists to describe the condition where the allocation of goods and services by a market is not efficient. Market failure can be viewed as a scenario in which individuals' pursuit of self-interest leads to bad results for society as a whole.[1] The first known use of the term by economists was in 1958,[2] but the concept has been traced back to the Victorian philosopher Henry Sidgwick.[3]

The belief that markets can have inefficient outcomes is a common mainstream justification for government intervention in free markets.[4] Economists, especially microeconomists, use many different models and theorems to analyze the causes of market failure, and possible means to correct such a failure when it occurs.[5]


http://en.wikipedia.org/wiki/Market_failure

The free market does not work when social costs/benefits do not meet the private cost/benefit. For example the private benefit (company profit) of building a park does not equal the social benefit (the welfare of the users) so the private company would not build it; therefore, the government step in. The same is true to a certain extent for much of the publicly directed economic activity.
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Re: US faces lost decade

Postby LoneSnark » Sat 01 Mar 2008, 20:32:23

^ Image
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Re: US faces lost decade

Postby phaster » Sun 02 Mar 2008, 02:17:35

Curious if anyone else consider that what is going on in the economy (basically its tanking), and with peak oil (basically commodity prices going up), is basically inevitable event?

In other words humanity as a whole has experenced exponenital growth rates in terms of various economies, and populations, the past hundred years, so eventually there will have to be a reversion to the historical mean.

Personally I figure if ya accept the inevitable fact that things can go down, it allows ya to consider ways to cushion the fall.











$this->bbcode_second_pass_quote('wisconsin_cur', '[')url=http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/02/28/bcnusrates12.xml]Telegraph: US Faces Lost Decade[/url]

$this->bbcode_second_pass_quote('', 'T')he US could be facing a "lost decade" like that suffered by Japan in the 1990s as the markets fail to respond to interest rate cuts and the US Federal Reserve runs out of options, the head of one of the leading private equity firms said today.


I think this is what Mr. Bill has been warning us about.

$this->bbcode_second_pass_quote('', 'M')r Collins, whose firm has significant expertise in Japan after leading the buyout and turnaround of Japan Telecom, said he believed a "sharp repricing of assets" was the most likely outcome.

But he said: "My fear is that we will prolong it and suffer a death of a thousand cuts after we have exhausted all the options."

"Even without a recession and with all of the policy tools available we still have hundreds of billions of dollars of losses."

Japan has only recently emerged from a period of zero interest rates.
truth is,...

www.ThereIsNoPlanet-B.org
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Re: US faces lost decade

Postby LoneSnark » Sun 02 Mar 2008, 11:54:24

$this->bbcode_second_pass_quote('', 'C')urious if anyone else consider that what is going on in the economy (basically its tanking), and with peak oil (basically commodity prices going up), is basically inevitable event?

In other words humanity as a whole has experenced exponenital growth rates in terms of various economies, and populations, the past hundred years, so eventually there will have to be a reversion to the historical mean.


Yall sure enjoy saying this crap. I accept it is possible for the race to run out of stuff and have trouble, but just given the signs we have now I see no proof we are there yet. Long term oil contracts are still only $70 a barrel. I trust traders betting their own financial futures more than I trust you guys proclaiming oil prices are going to go even higher forever.
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Re: US faces lost decade

Postby dohboi » Sun 02 Mar 2008, 13:59:27

Of course, LS, none of us knows the future and it is especially hard to know the timing of down turns (or up turns for that matter) ahead of time. But just because people put their money behind something doesn't mean that they have a special crystal ball.

As you know very well, many, many very smart people put a whole lot of money behind Enron (or pick your favorite tanked corporation or investment) before it went belly up. Are you saying there is something special about traders in futures of oil that sets them above all the other smart people who have put their cash into what turned out to be bad bets?
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