Posted on 07/31/2002 8:00:47 PM PDT by Axion
Richard W.
BWAHAHAHAHAHAHAHA! So you like my HTML abilities do you.......
While economists have been complaining in recent months about the disconnect between the bear market and the improving economy, they didn't notice the disconnect building between their economic models and what's actually happening out there in the economy.
Here is the complete text of the article:
Jobs now the critical indicator
Richard W.
Moreover, the combination of an unneeded war, and a bad economy, is pure political death.
On the other hand, a NECESSARY WAR, which I think Iraq is, does wonders to stablize markets worried about the future. Nevertheless, I do NOT think that the "war on terror" is driving the current economic issues one way or another, except to say that the vast destruction caused by 9/11 was deeper than most have thought. Whatever is going on, it is being driving by 1) a total restructuring of corporate asset accounts based on stock options estimates; 2) public perceptions of corruption; and 3) both REAL and media-driven concerns about profitability. (I don't think #3 has the analysis of why these companies aren't profitable right, but it doesn't really matter for our discussion).
I think to try to link the war with this, one way or another, is a mistake.
What vast destruction? We suffer through natural disasters 100 times worse than 9/11 (property loss, not life) and do just fine. Any economic problems that we are having now weren't caused by 9/11.
The war on terrorism or the upcoming one with Iraq is just a distraction. It will take the publics mind off the economy and provide political cover for the ruling class. Otherwise, someone just may try to hang them. You know how unfashionable and UNPATRIOTIC it is to criticise the government while the country is at war. As I have been saying, listen to the drumbeats of war. The louder the beat, the more bad economic news we can expect.
Richard W.
Richard W.
On he 9/11 destruction, you should go to the Milken Institute web site. Some months ago their economists did a study of the economic cost of 9/11. Go to www.milken-institute.org or www.milken_institute.org (I can't remember which) and look for an article called "The Butcher's Bill." It not only was INITIALLY staggering, but it pushed the already fragile (and admittedly badly-priced) airlines over the edge; that, in turn, further damaged tourism. Look at Disney---the THEME PARK division, which has always been a money maker, announced losses this year. This is almost directly due to 9/11. We were in Vegas a month or so ago---9/11 shut down the entire strip for days, and shut down NY NY hotel for a WEEK due to a similar bomb scare. The people there told me that just THEN (May) they were back to 80-90% of where they were Sept. 10. So you can't tell me that wasn't HUGE. Then throw in the addition burdens of the fed. deficit and all that that implies---I know, it was going to be in deficit anywhy, but nothing like that. So I think 9/11 hurt more than anyone knows.
The only point that I'm trying to make here is that The Office of Propaganda and Information Management is going to point at a variety of causes for the weak economy. It will be 9/11 or it will be the war on terrorism or it will be Wall Street or it will be Iraq or this and that. The last place they want us looking is at the government. It's the old blame game and big business or terrorism are easy targets.
9/11 was tragic, make no mistake about it but you sure can't blame it for the unraveling of a bubble economy.
Richard W.
Richard W.
http://www.milkeninstitute.org/review/2001qtr4/index.html
a day at Disneyland may be worth $500, even though the price of admission and assorted souvenirs is just $100. We reiterate: the point of this admittedly rough exercise in social accounting is to put the losses in useful context.
A two-day partial work stoppage and attendant loss of productivity, as the nation adjusted to the shock, likely cost another $35 billion.
the value that people implicitly place on their own lives rises with income and included in how people value their own lives, the 6,000-plus death toll translates into an economic cost in the range of $40 billion.
Accordingly, we estimate the value of the 788 million hours lost to be some-where between $16 billion annually (valuing time at $20 an hour) and $32 billion annually (valuing time at $40 an hour).
Counting the value of lives lost as well as property damage and production of goods and services forgone, the United States has already suffered losses exceeding $100 billion. Including the loss in stock market wealth – the market’s own estimate arising from ex-pectations of lower corporate profits and higher discount rates for economic volatility – the price tag approaches $2 trillion.
If you are buying into this, I have nothing to say.
Richard W.
I already told you that Las Vegas was virtually shut down for three days, and New York New York casino completely shut down for a whole week. Las Vegas alone was off 50% from 9/11.
I don't see at ALL what you find mystifying about putting a dollar value on the 3000+ people killed. Any insurance company or economist (who do this routinely to calculate the impact of wars, military actions, or even environmental/safety laws) would have the slightest qualm about a $40 billion figure on human life loss. So where is YOUR evidence. As usual, Richard, you bash and dismiss, but don't provide anything except some guy's wierd internet gold report.
Manufacturing investment is up. Not a huge amount, and not across the board, but this is another KEY indicator. Gears, nets, bolts, machine tools---UP.
P&G, a great company, had better than expected earnings.
GM voluntarily today said it would "expense" options.
And, I see this as a good sign, a report yesterday said that several Venture Capital firms---which is where the REAL next explosion is going to come---returned money to investors. I see this as good because 1) they didn't waste it in "speculation" and 2) the money is "out there," just no opportunities right now.
That leads me to think that we are in for another 6 months (at least) of mediocrity and + or - 10,000. But as my broker (whom I trust) told me, "the money IS out there, and it isn't going anywhere." When the opportunities appear again---and they will, if mfg. investment is up and consumer spending is up---VC will soon again look for a home.
You have to remember that several groups have an interest in keeping the economy down: 1) Democrats, desperate for an election issue; 2) liberals and socialists, who hate capitalism, and ESPECIALLY a growing stock market which makes people less dependent on government; and 3) goldbugs who always want a depression to validate a position that has not proved right for 50 years. I also tend to think that there are a lot of Y2K "gloomsters" who are still pi**ed that their idiotic predictions about mass meltdown did not occur.
Now, are there REAL PROBLEMS? Of course. We are WAY overtaxed, still. The regulators are worse than ever. South America is not in good shape---but then, can ANYONE tell me a time when it was? (Remember the 1970s, when the big banks were lending in SA because the U.S. opportunities sucked---look what happened: in the 1980s, the big banks all quietly wrote off all those loans and you never heard a word about it). Also, there is this WAR business, which DESTABILIZES MARKETS. Capitalists do not like wars, and always see wars as unpredictable, contrary to popular belief. This is masked by the fact that usually in "big" wars the government takes over the economy and conceals price increases and "forces" productivity increases---in war goods only---by either controlling or operating the companies.
So there are wild cards. I'm ONLY optimistic about the evidence I see of productivity increases, manufacturing investment, consumer spending (which I think even Richard admits does not EQUATE with "inflation": everyone now agrees (I think) with the position I've held for five years that we are in DEFLATION. You cannot have massive consumer spending and productivity increases, absent huge infusions of money, and not have economic growth. It is purely impossible.
Just watch.
Richard W.
Market up again. Specualtion that the Fed may cut interest rates. Yep, that's a REAL SIGN of "inflation," right? No. It is a clear sign of deflation, despite the fact that consumer credit is still expanding.
Now, when you see consumer credit grow, you have a negative response ("Oh no, all those people getting deeper in debt means they are worried.") But I have seen studies that show just the opposite---that people take on more consumer debt when they have a POSITIVE outlook about the economic future.
Yes, we are showing signs of deflation much like Japan. As far as the consumer debt issue, I've already heard that line of spin. Sounds good and probably makes perfect sense to those in denial. It is a great excuse. Kind of like those sheep who are out spending on credit to show their patriotism. Geez -- give me a break.
Richard W.
We have already established (remember) that productivity is rising. If productivity is rising, and consumers are buying, it ain't signs of a slowdown. C'mon, bro, you've got to have more evidence than a couple of days of stock price drops.
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