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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: Ilaine who wrote (8298)	9/6/2001 11:24:58 AM
From: Don Lloyd	Read Replies (2) \| Respond to of 74559

CB - ...So the widgets pile up, and the manufacturer cuts prices, maybe has to junk them - that's not a failure of consumption, that's over-production. Poor information.... Possibly poor information only in that the future is not correctly foreseen, which is nearly the universal condition. Total over-production is also the result of even just two competitors believing that they can each supply the whole market by themselves. Even if information is perfect, both competitors may simultaneously read all the signals correctly and enter into full production, with the only problem being the initially unseen competitor. Regards, Don

To: Ilaine who wrote (8298)	9/6/2001 12:20:24 PM
From: KyrosL	Respond to of 74559

>>the aggregate of all US consumers, or maybe all consumers anywhere in the world that consume US output, or world output in the US, it's not clear I meant the US consumer. The effect of non-US consumers on the US economy is trivial. And while US consumers consume lots of non-US made goods, the contribution of those goods to US GDP is substantial, even though they are made abroad. These goods are typically marked way up when sold in the US. They support a large part of the US services GDP. >>Assumption that consumption has been financed by debt, and there's no way to take on more debt. Well, as you know, debt service as a percent of disposable income is near record levels in spite of record low interest rates and record high employment. I think my assumption is based on solid evidence. >>and that an alternative method of paying for consumption beyond one's income is to dip into savings, but there are no savings Not exactly. I am saying that savings rates in the last few years have sunk way below their long term average. They are due for a return to the long term average of high single digits from around zero, where they now hover. People's balance sheets look healthy right now, only because of the mini real estate bubble we are experiencing. And they are taking advantage enthusiastically of that bubble via cash out mortgage refinancing. If the real estate bubble bursts, look out. >>he/she has all the durable goods he/she needs/wants at the present time. Exactly. Car sales have been at or near record levels for the last few years. They are 50% above early nineties levels. House ownership percent is also at a record -- although the percentage of home equity is at record lows. High tech consumer goods such as PCs and mobile phones already show sales declines, something that nobody expected a year ago. I think cars, appliances, and houses will follow.

To: Ilaine who wrote (8298)	9/6/2001 1:24:39 PM
From: elmatador	Respond to of 74559

<<What kind of jobs are our children going to have?>> The western countries are facing the prospects of becoming more and more 'vapor economies'. Those economies are becoming economies based on intangibles. In the near future the major components of their GNP will be: Marketing, legal litigation and lobbyies, hotel conferences and training. If the marketing blitzes work, if the legal litigations are completed and the lobbyies succeed, then they can go ahead. But they don't need their traditional departments. They just need a Flextronics here and Celestica there to make the stuff. But countries need the traditional economy. You know: thoise guys hammering houses trusses to support roofs. Driving Ready Mix concrete trucks to put concrete in houses' foundations. Companies producing copper wire and household appliances, and hospitals to deliver babies... This traditional economy can only be supported if the developed countries engage themseklves in mass immigration. Because the developing countries have the inputs that developed countries are lacking: babies! It is a choice between: Becoming an economy of insurance companies or keeping that traditioonal economy going. PS: Sorry for the spelling. Drinking gin tonic and waiting for the tennis match Guga vs. Kafelnikov in the US Open.