The coming financial crisis

[rjs246]

Is it your opinion that exports and productivity are certainly not going to return to normal? It seems to me (at least in theory) that with a renewed focus on producing and exporting goods some of the problems around the service-based nature of our economy can be mitigated, but I have no idea what that would entail, whether it's feasible or even possible. Sounds like you have a hell of a lot more economic training and background than I do so I'm curious...

[rjs246]

Some ideas that will never happen because they rely on political cooperation.

[Rome]

What the farg does this country even export aside from food and weapons these days?  And more to the point, everyone around the world is ass deep in debt and can't afford the shtein we'd sell them anyway, so really, what's the point of cranking up an economy to produce shtein no one can afford now?

[General_Failure]

What the farg does this country even export aside from food and weapons these days?

Intellectual properties.

[Diomedes]

We export a lot of bombs one way or another.

[Seabiscuit36]

i export pain and suffering

[Butchers Bill]

Is it your opinion that exports and productivity are certainly not going to return to normal? It seems to me (at least in theory) that with a renewed focus on producing and exporting goods some of the problems around the service-based nature of our economy can be mitigated, but I have no idea what that would entail, whether it's feasible or even possible. Sounds like you have a hell of a lot more economic training and background than I do so I'm curious...

There is a phrase thats been beaten to death the past couple years, the "New Normal".  Bill Gross (who I consider the best investor ever...Buffett can suck it) coined it and everyone else has essentially stolen it.  The New Normal for the US is essentially little to zero real growth, with inflation and a weakening dollar halting any substantial gains.

Producing and exporting should (theoretically) increase as the dollar weakens because foreign currencies will be able to purchase more of our junk.  The problem is we have no manufacturing base left and its virtually impossible to open a factory of any kind in the US due to environmental regulations and the cost of labor.  Also consider that as our dollar weakens its less likely that other countries will be willing to finance our over exuberance.  The cost of labor is only an issue because our government as re-established the slave trade of the 1600-1700's except this time is Asians instead of Africans. 

The best case scenario would be a return to a more balanced economy where we actually MAKE stuff (Bill Gross said in 2004 that we need to export more than Krispy Kremes and Treasury Bills), but that would take concessions from the G.O.P. on the whole slave labor thing, and the Dems on the environment and labor costs.  We have become so polarized politically that I am afraid its a lost cause.

[rjs246]

TARP is getting closer to breaking even for taxpayers.

I'm amazed, frankly. I was completely apalled by the bailout when it happened but lo and behold it looks like it might have saved the financial system AND not cost the country that much. Pretty remarkable.

[rjs246]

Along the same lines...

AIG is about halfway to paying back its loan to the taxpayers...

Again, amazed.

[Sgt PSN]

i'm not amazed that they're repaying their loan but i'll be amazed if they incorporate better business practices, especially in regards to their frivilous spendings. 

[rjs246]

America's workers don't have enough in their retirement funds.

I think this is going to be the key to the next huge national issue. Social Security is a disaster. Companies don't offer pensions anymore. The cost of living and healthcare has outpaced the increase in salaries by a wide margin and everyone's 401(k) took a massive hit last year and made it all too apparent that the stock market is not necessarily the guaranteed safety blanket that we had been told it was. All of this leads me to think that the flood of retirement aged people in the population are going to be shocked into action when they realize that they can't retire.

[reese125]

Oh I think they already hit that point about a year ago

[fansince61]

What the farg does this country even export aside from food and weapons these days?  And more to the point, everyone around the world is ass deep in debt and can't afford the shtein we'd sell them anyway, so really, what's the point of cranking up an economy to produce shtein no one can afford now?

Lots of research and medical equipment for sure

[Father Demon]

America's workers don't have enough in their retirement funds.

I think this is going to be the key to the next huge national issue. Social Security is a disaster. Companies don't offer pensions anymore. The cost of living and healthcare has outpaced the increase in salaries by a wide margin and everyone's 401(k) took a massive hit last year and made it all too apparent that the stock market is not necessarily the guaranteed safety blanket that we had been told it was. All of this leads me to think that the flood of retirement aged people in the population are going to be shocked into action when they realize that they can't retire.

I agree with you.  I'm amazed that so many of the people I know - smart people with good jobs - that have somewhere between $10K and $50K in their 401(k). I obviously don't know about any other retirement accounts, but I have to assume that many of them don't have them.  These are people in their 30's and 40's that have decided it's better to spend everything (and then some) on cool cars, houses that are too big for their families, 4 plasma TVs and home theatre rooms, etc.  I feel for them as they begin to realize - shtein, I only have 20 years to retirement, and I'm going to be lucky to have $100K or so then, and I'll have to keep working.

As a country, the recession has had one positive effect - the population as a whole is saving more:

http://www.bea.gov/briefrm/saving.gif

Of course, if you extrapolate that the average worker in the US earns $58K (as reported in 2006, last figure I can find), then 4 to 5% of that is not much.  And that's assuming that 100% of that extra money is being saved and/or invested.

[rjs246]

Worried about Government spending? 

12 steps to saving $1 Trillion.

Really good stuff right here.