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What i am lookig at is when the cheap money is gone and governamnt has to stop replacing the consumer in the econmy by injecting massive liquidity into it. Basically then we will see. Just the fact that CBO says that the deficit with a 40% cut in discretionary spendinhg by government would not balance the deficit by 2050 is scary indeed.I also don't see employemnt really improving until there is more stabilty and until then they will hold the bottomline on any investment really.
Sounds about right. I too think we will see the Dow well below 10,000 by the end of the year and 4,000 wouldn't surprise me a bit.
Historically, the DOW runs opposite of the economy. The worse things get, the better the DOW will do. We saw that all through the '20s, '30s and '40s. The worst stock market run ever took place during the greatest period of expansion, when the GDP was growing at 9%-12% per year between 1937 - 1942. We saw it again in 1945, then again 1959-1961. During the recession, the stock market broke records, but once the recession ended, the stock market collapsed 25% during Kennedy's first year.
And then we saw it again during the 1978-1985 recession.
Quote:
Originally Posted by bchris02
I think unemployment will hit 15% by year end, with real unemployment near depression levels of 25%.
It won't be that bad, at least not yet. That's to come. If you count unemployment the old way, before Clinton changed it in 1997, it'd be about 12%-13% right now.
Quote:
Originally Posted by bchris02
Call me on it later, but right now I predict a -10+% drop in GDP for Q4 2010.
Things will get worse in September. It'll be another Holiday Bust.
Quote:
Originally Posted by bchris02
Question is, when will it get to the point where the American public can't take it anymore and people take to the streets with their guns? This is not the society of the 1930s.
It won't come to that. We aren't there yet, but it will be a "Silent Depression."
In part because of the way unemployment is calculated, and in part because more jobs are being lost permanently lost than are being created.
When all is said and done, two-income families will no longer be the norm. People will resign themselves to it and that will be the end of it.
IIRC, Mr. Kunstler has been saying much the same for years on end; oh woe, the end is near, kiss your ass goodbye, etc. I'll pass.
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IIRC, Mr. Kunstler has been saying much the same for years on end; oh woe, the end is near, kiss your ass goodbye, etc. I'll pass.
I equate the situation we are now confronting as two automobiles hurtling down the road toward each other at 130 mph. In one car is population growth, in the other is the imprudent wasting of financial and natural resources. Either is dangerous, but running full speed toward each other is inviting catastrophe. Those in control of both cars refuse to acknowledge the danger. Driving fast is fun, and it is a cool way to show off. They console themselves that there won't be a horrendous wreck, because--after all--it hasn't happened. That doesn't change the fact that the cars are closing distance toward a collision at breakneck speed.
Those more experienced passengers with more common sense can see the danger and they admonish the drivers to slow down, but they are shouted down by the passengers enjoying the fast ride and the drivers refuse to hear any voice of prudence. All the while the closing distance between the two vehicles is getting shorter and shorter. By the time the drivers and ignorant passengers realize the danger--when the opposing vehicle is in clear sight--it may be already too late to avoid a deadly collision--or the evasive maneuvers necessary to avoid a collision may be so drastic or inherently dangerous themselves that sure injury or death no matter what happens may be unavoidable. I think we are very close as both a nation and a world to that point where some nature of catastrophe--World War, world famine, etc. may be nearly unavoidable. Some of us see that danger, but most of the intoxicated, happy passengers in the car wish to hear nothing of our warnings. If anything, the leaders of our country at both ends of the political spectrum are pushing the accelerator to the floor, making an absolute catastrophe a virtual certainty.
Kunstler is definitely an intelligent, articulate, and astute man. No one denies him that.
However, he also strikes me as a sort of Ralph Nader "Lite": Huge chip on his shoulder, very angry with the world, wants to ban ban ban, and has nothing but negativity with few or no solutions outside of rhetoric to back them up though he does have *some* good points.
Some of what he says *may* or may NOT happen in some way or form. I don't know that I'd necessarily agree with him word for word, scenario for scenario. He seems to obsess with making predictions. I'd give his track record about a 40% accuracy rate at best. So I don't know that I'd place all that much stock in them.
And he has a neurotic obsession with the phrase "sustaining the unsustainable". VERY few of his blog entries do NOT contain some form of this verbiage. Many of them repeat it multiple times. Ok Jim. I get the picture. In case I missed it the last three thousand times you uttered it. Well for what it's worth, all of the anchors hanging around the neck of the economy today, his "unsustainable Happy Motoring era" appears to still be chugging along just fine. Maybe it will come to an abrupt halt. Maybe not. But not much else of what he's said has come even half to pass, let alone all of it.
The man in my opinion can perhaps use a little, oh I don't know, a night with a woman of low morals if nothing else. Maybe that will get him to loosen up a bit and perhaps enjoy a little bit of life that seems to be passing him by.
But he makes for some entertaining reading though.
Sadly, I'm not very optimistic. If all of our over-leveraged lifestyle could crash back to reality--in terms of everything from people not living beyond their means, stopping out-of-control population growth (much of it coming from immigration and much of that illegal immigration), stabilizing and then reducing both government spending and then the national debt, and embracing the conservation of natural resources as zealously as a religious crusade--then and only then, I think we could begin the process of rebuilding this country into a more respectable, albeit more materially austere place. But, to do that, would take the majority of Americans going back to some values long-discarded: the idea of community before self, the mantra of taking personal responsibility for one's actions and obligations, to doing what is necessary and right for the generations that will follow us, to embracing the idea that what you save is more important than what you spend and that what you conserve is more important than what you consume, and to be thankful for what we DO have and not be bitter or envious about what we don't have. Unfortunately, we seem to be eschewing those values more every day, rather than embracing them. That is the classic sign of a society in permanent and likely irreversible decline.
Awesome post. You could not be more right. We as a society have lost the morals, values, & ethics we need to reverse this. I'm very worried about our country and our children's futures.
I equate the situation we are now confronting as two automobiles hurtling down the road toward each other at 130 mph. In one car is population growth, in the other is the imprudent wasting of financial and natural resources. Either is dangerous, but running full speed toward each other is inviting catastrophe. Those in control of both cars refuse to acknowledge the danger. Driving fast is fun, and it is a cool way to show off. They console themselves that there won't be a horrendous wreck, because--after all--it hasn't happened. That doesn't change the fact that the cars are closing distance toward a collision at breakneck speed.
Those more experienced passengers with more common sense can see the danger and they admonish the drivers to slow down, but they are shouted down by the passengers enjoying the fast ride and the drivers refuse to hear any voice of prudence. All the while the closing distance between the two vehicles is getting shorter and shorter. By the time the drivers and ignorant passengers realize the danger--when the opposing vehicle is in clear sight--it may be already too late to avoid a deadly collision--or the evasive maneuvers necessary to avoid a collision may be so drastic or inherently dangerous themselves that sure injury or death no matter what happens may be unavoidable. I think we are very close as both a nation and a world to that point where some nature of catastrophe--World War, world famine, etc. may be nearly unavoidable. Some of us see that danger, but most of the intoxicated, happy passengers in the car wish to hear nothing of our warnings. If anything, the leaders of our country at both ends of the political spectrum are pushing the accelerator to the floor, making an absolute catastrophe a virtual certainty.
Another solid post. Great analogy and dead on accurate. Bravo!
However, he also strikes me as a sort of Ralph Nader "Lite"
That's funny. I like that.
Quote:
Originally Posted by jazzlover
In one car is population growth, in the other is the imprudent wasting of financial and natural resources.
Population growth is not necessarily a problem. It depends entirely on your perspective.
"Pick a number, any number at all from 0 to 1,000,000,000,000 for the maximum number that the Earth will support and there will be a scholarly supporter for that number. This is especially true if you fund a univiersity chair for that scholar."
Population growth is not a problem for the rest of the world, but it IS a problem for Americans. As more people gain access and affluence, they consume more resources, which drives up the cost, which causes cost inflation, and when coupled with the low value of the US Dollar, results in reduced consumption by Americans, and since the US economy is consumption-driven, that means the permanent loss of jobs, reduction in wealth and affluence, and a "lower" standard of living.
Quote:
Originally Posted by Des-Lab
And he has a neurotic obsession with the phrase "sustaining the unsustainable".
I don't believe it to be "neurotic."
To me, it's simple math.
The US consumes 29% of the world's non-oil resources. In order for a like amount of people in India (300 Million out of 1 Billion) and China (300 Million out of 1.6 Billion) to have a life-style similar to Americans (and don't forget there are, um, "homeless" Americans and a large percentage that earn less than $24,000 per year) the Indians and Chinese would also each consume more or less 29% of the world's non-oil resources.
The math is simply 29% + 29% + 29% = 87%
So the rest of the world (and that would be 5.7 Billion people) is using 13% of the world's non-oil resources?
No, someone is going to have to give up something.
That is what is meant by "sustaining the unsustainable."
Short of nuclear war, the US cannot maintain control of the world's non-oil resources. In the not-too-distant future, two-income families will be ancient history. It'll be just like the 1970s, when 13% of US families had two wage-earnes, not the current 67%.
This is inevitable, and it can happen naturally, with a lot of stress and angst and ugliness, or intelligence can abound and planning for it will result in a smooth seamless transition to a less affluent life-style for the majority of Americans.
IIRC, Mr. Kunstler has been saying much the same for years on end; oh woe, the end is near, kiss your ass goodbye, etc. I'll pass.
While you're poking fun at the very idea Knustler might be right it often takes a dash of fear to wake people up to times that are a changing. I think that's what Kunstler is doing with his forecast.
While you're poking fun at the very idea Knustler might be right it often takes a dash of fear to wake people up to times that are a changing. I think that's what Kunstler is doing with his forecast.
Times are always changing.
It's like in the Great Depression, people did what they needed to do.
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