Posted on 01/17/2009 7:00:43 PM PST by SeekAndFind
Amazingly, equities will end the year up. Most shareholders will experience something they've forgotten existed: capital gains. True, the economy is now in a bad slump, and the Obama initiatives (see below) will do little, if any, long-term good. But the forces of recovery will break through. As they always do, stocks will rise before the economy does. There will be volatility aplenty, but imperturbable bulls will be smiling a year from now.
Big Bar to Robust Recovery: Bad Ideas
The U.S. is enacting a "stimulus" program of gargantuan peacetime proportions to rejuvenate our recessed economy. We are not alone in this. Japan, China, Europe and numerous other nations are doing the same--not yet as big as our program but based on the idea that governments can rekindle growth.
It's all mostly wasted effort.
Governments are indeed critical to economic growth--but not in the manner we see unfolding here. While times and circumstances change, principles of economic growth do not. The basic ones have stood the test of time:
--The rule of law, especially property rights.
--Money that is stable in value, which the dollar manifestly has not been.
--Low tax rates.
--Ease of starting a new business.
--Minimal barriers to doing business, whether overseas (low or no trade barriers) or domestic (no internal cartels or onerous licensing procedures).
Despite its sheer size, the impact of the new President's fiscal program, after the initial euphoria, will be painfully limited. Instead of a jolt like from downing a six-pack of Red Bull, we'll get the economic equivalent of a tepid cup of decaffeinated tea. In fact, the waste and misuse of much of the money--inevitable in any quick, massive government-managed or -directed program--will negate much of the good in parts of this infrastructure-spending package.
(Excerpt) Read more at forbes.com ...
You only need the pressure cooker if you are canning meats or eggs. Fruits and vegies can well with an ordinary porcelain cauldron. The lids, rings, and jars are definately a smart buy, unless your place is in a warm climate. We definately are looking at 3 or 4 years of sharply declining temps.
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Mobile, is that warm enough, lol.
"We definately are looking at 3 or 4 years of sharply declining temps."
You mean the weather temps?
Your post is cogent, salient, and even optimistic.
I will not postulate as to the economic future of this nation. However, I am an ant.
Yes.
I'm just starting to learn about all this myself, but I think most veggies need a pressure cooker as well. If the food is very acidic, the acid will help prevent bacteria growth, but if they are low-acid foods you need to pressurize.
So fruits can be canned without pressure, and tomatoes too, which are very acidic. But I believe something like carrots needs to be pressurized--unless you pickle them in vinegar which is acidic. Of course, carrots keep in a root cellar, so you might not even need to can.
The media will be cheer leading 0 for a while yet. That will result in a 0 bump in the markets. Sustainable or not it is hard to tell but it will affect real money. I moved some out of money markets into equities on Friday to capture some of the drunken euphoria. Nothing major, just a toe in the water.
“Reminds me of why I was a Forbes booster.”
Never supported his presidential run, but Forbes exudes what every conservative should nurture in abundance - optimism. President Reagan had it and washed away the Carter malaise in less than two years.
The gloom & doom parades marching thru FR do little good.
The reason I say it’s hit the rich disproportionately, is simple. They own the stocks that are now worth 1/2 what they were worth. They own a lot of the real estate which is now worth a fraction of what it was worth. For the most part, this debacle has taken the form of a decline in the value of assets. And who owns the assets? The rich.
I don’t feel sorry for the rich. I’m just observing that if you don’t own stock or real estate, then you are not much affected by this recession, provided that you don’t lose your job. In fact, the lower incomes who don’t own real estate or stock might be better off as a result of this recession, assuming they have a job. Gas is cheaper, food prices have stopped escalating. Housing is cheaper.
But unless they sold, they still own. The value has declined but the assets are not gone...... except of course some companies who died
Sounds like Henry Paulson. Unless your house is on fire, it is prudent to distrust anyone who hustles desperate action based on urgency. It is the cardinal warning flag of a con artist at work.
--Money that is stable in value, which the dollar manifestly has not been.
--Low tax rates.
--Ease of starting a new business.
--Minimal barriers to doing business, whether overseas (low or no trade barriers) or domestic (no internal cartels or onerous licensing procedures).
None of these are present in today's America. What does that say about our chances?
That's a bit sooner than I would have said, but the target sounds about right. I think it will be well on its way down by summer, but hit bottom closer to Fall.
We shall see.
Reagan was president, now we have Obama. Big difference. Reagan also had Paul Volker at the Fed to break the inflationary cycle. Obama is going to fuel hyperinflation. Big difference.
Optimism is great but realism is what gets you to cut your losses and preserve your capital.
The optimists are still holding portfolios and mutual funds that have cratered and may take a decade to come back, if ever.
Same here. And a great guy.
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