Hi Elmat, This is a Vacation Chronicle rant. Today is my sixth day here. I have spoken to a bunch of folks, ate dinner out for four nights, read one issue of Barrons, and watched 15 minutes in total of CNBC. Now I am an expert on the US of A:0)
I actually think I see what is going on, which means that I am probably wrong.
The FED has flooded the system with liquidity much as the Emergency Room doctor fills the gunshot shock patient with IV solution and whatever else, replacing lost vital blood and life force with manufactured liquids, keeping the all markets functioning.
And so, what I am seeing, not surprisingly, is an operating economy serviced by a functioning financial market saved, for however long, from internal imbalances, exogenous shocks, avoiding a deep recession or shallow depression, at almost and possibly all cost.
Take today’s observation for example, Kaiser Aluminun joins Global Crossing and Enron, even while Blockbuster, the video rental outfit reports above expectation earnings.
What is the message? Well, manufacturing is declining, service companies seem the way to go, until such service companies implode into an asset-less pile of accusations. Another observation? Global Crossing, in its multitudes, would presumably have bankrupted Blockbuster, have no chance, for now, even as there is nothing to watch on TV saved for news and sports.
Nearer by, the two bookstores adjacent to each other with about 4-5 staff, have no “FIASCO”, and my Barns & Noble Internet ordered copy arrives, costing a total of USD 27 (incl. shipping) for a USD 12 book. I am trying to note the famous productivity equals profit equals economic growth solution in these simultaneous equations, and the answer is not yet obvious.
I suppose the 4-5 bookstore staff can disperse to work for FedEx, service www.bn.com servers, or become writers. I am not sure what will happen when ebooks take off, instigated by the MSFT, INTC and AOLs of this world.
It may be that the number of (worthwhile) books sold per year has not increased to any extent worth mentioning, certainly not justifying a financial market mania over the cyber book store operations, and that the Internet enabled book sellers have simply rearranged the chairs in their own favor, from the little guys, and they in turn, soon, will have their chairs taken away by others, selling the same number of books.
In any case, the system now is emphasizing consumer spending over productions, overseas capital inflow over domestic savings, and debt over equity, creating the set of conditions increasing still more the imbalances and thus adding to the susceptibility to external shocks.
The media and academic spin is that the strong USD is a free lunch with no bill to settle for all times, and so, invest, the water is safer than when NASDAQ was at 5,000. False and true.
According to Mike AC Flyer, I am worried about nothing, and so I do not, holding on to my various flavored purchasing power in the meantime, until such moment when the visibility is less polluted by media chants and the solution to the simultaneous equations prove solvable without dismantling the imbalanced wheels, cogs, and drive trains.
Chugs, Jay |
