Heinz Blasnik- Views You Can Use Message Board

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Strategies & Market Trends : Heinz Blasnik- Views You Can Use

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To: The Ox who wrote (703)	5/5/2003 4:33:43 PM
From: Wyätt Gwyön	Read Replies (3) of 4912

i think you misunderstood me. i was talking about a worse-case scenario, and i modified this by stating "hopefully and probably not as severe." however, while i doubt our economic hardships will be as severe as in the Great Depression, i suspect they will be much more severe than what has been discounted by the market. and we could have serious dislocations today that were unimaginable in the 30s. just over the weekend Munger, who i doubt is a lunatic, stated he would be surprised if there's not a derivatives meltdown in the next 5-10 years. luck, like financial intelligence, is cyclical. the US and much of the world were lucky in the 90s. there's been some unluck in the 2000s on the geopolitical fronts, and now SARS from leftfield. who even a few months ago would have imagined large parts of Asia would be shut down and Beijing a no-fly zone? life is full of surprises and they aren't always good. maybe unluck continues and who knows where that leads. the 1920s were a very lucky time coupled with the country's greatest five-year period of real productivity growth. this was followed by the worst economic period in US history, coupled with unluck like the Dust Bowl and Hitler and leading to WWII. is it impossible for the US to be so unlucky again? Try 18% unemployment instead of only 6%!!! it is hard to know what the current real unemployment numbers are, as the govt has become very adept at creating deceptive numbers. e.g., only those actively seeking jobs are counted among the unemployed; those too discouraged to work are not counted. perhaps a better metric is the employed workforce rate, which stands at about a decade low. i am very concerned about possible attrition of skilled labor and secondary effects in the US as service jobs are exported to China and India. so far the service sector of the US has held up fairly well even as our manufacturing sector has been gutted. what are the long-term implications of large parts of the skilled service sector having to compete with people in the developing world working for $2000-$5000 a year? it may be that the current recession does not just "snap back" the way it used to.

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