Hi, Michael!! You are right--it has been over two years now that some of us have been here. Sometimes I imagine myself as a grizzled, gnarled old woman still logging in. In my dream I have a walker, a funny hat with plenty of flowers hanging off of it, and I have written some more poems. And the Feelings thread will have grown to several hundred thousand posts! I am not sure whether it is a happy dream or a nightmare, however, because I remain a little ambivalent as to whether SI comes closer to being a valuable resource or a total waste of precious time. I do know that many, many people, including me, have lost a whole lot of their money on stocks they never would have even noticed if their brokers had been guiding their investments.
There is a lot about this medium which is like the frontier, not only in the sense of exploring the unknown, but in a dangerous way as well. But yes, to answer your question, it is quite possible that you and I will still be arguing about school lunch programs and the homosexual "lifestyle" in ten years! Thinking about that makes me smile. I hope we manage to come up with some new subjects to debate!
Speaking of new subjects, what do you think is going to happen with the economy in the near future? I noticed last week that California's unemployment rate is starting to creep up a little. This article is not terribly reassuring, although it sounds like an opportunity for bargain hunting:
Cooler Economic Forecast for U.S
By Martin Crutsinger
AP Economics Writer
Friday, July 3, 1998; 1:23 p.m. EDT
WASHINGTON (AP) -- The summer forecast? Stormy and a lot cooler.
Not the weather, the economy. Analysts see the United States headed for
a dramatic slowdown in growth because of troubles in Asia.
And that is the best-case scenario. In the nightmare versions, economists
fear the Asian crisis could spiral out of control, bringing down first Japan,
then China and in short order engulfing the whole world in a global
recession.
While that doomsday scenario is considered only a remote possibility,
most analysts believe a substantial reduction in U.S. growth is not only a
virtual certainty but has already begun. Unemployment is inching up,
orders for manufactured goods are falling and the trade deficit is setting
records each month.
''The United States and other countries can't escape it,'' said Allen Sinai,
chief economist at Primark Decision Economics in New York. ''Since
Asia turned out worse than expected, the U.S. economy will turn out
worse than expected.''
The big question, of course, is just how much worse.
Recent signs have not been reassuring. This week, a closely watched
survey of manufacturing health reported slowing activity at more than half
the factories surveyed, the poorest showing in nearly two years.
And on Thursday, the government said the unemployment rate edged up
to 4.5 percent last month with the weakness led by a third straight monthly
decline in factory payrolls.
Hardest hit have been companies with a heavy focus on Asia. Nike, the
world's biggest shoe manufacturer, said this week it had lost $67.7 million
in the fourth quarter as its Asian revenues declined sharply.
Asia buys one-third of all U.S. exports. For April, America's trade deficit
climbed to an all-time high of $14.5 billion as U.S. farm exports fell to
their lowest level in 3 1/2 years.
Analysts said worse numbers are yet to come with America's trade deficit
in goods alone expected to hit a record $230 billion this year.
Bad as those figures are, many believe the rising trade deficit does not
represent Asia's biggest threat to the U.S. economy. The bigger threat
would be if Asia's financial troubles seriously harm America's high-flying
stock market and a big sell-off there frightened consumers and caused
them to cut back on spending.
Last October's 554-point drop in the Dow Jones industrial average, the
biggest one-day point loss ever, and more recent but smaller dips
provided hints of the potential problem.
The weakness that began in Thailand a year ago and then spread to
Indonesia and South Korea has now worsened economic conditions in
Japan, pushing it into its worst recession in 50 years.
Despite prodding from the Clinton administration, the Japanese
government has been slow to deal with its underlying problems, including
more than $500 billion worth of bad bank loans.
The Japanese government announced details of how it planned to deal
with its banking crisis Thursday, but the initial market reaction reflected
widespread skepticism that the proposal would be able to get the world's
second largest economy back on track.
''If we got a major financial crisis in Japan, that could trigger a major
stock market correction in the United States,'' said David Wyss,
economist at Standard and Poor's DRI. ''There is plenty to be scared
about for the next couple of years.''
Still, Wyss rated the chance of a U.S. recession in the next 18 months at
only one in five. More likely is that the U.S. economy will slow
substantially but continue growing.
Instead of the sizzling 5.4 percent January-March growth rate in the gross
domestic product, Wyss forecast growth slowed to just 2.1 percent in the
just-completed spring quarter and predicted it will hover around that rate
for the next year.
Such low growth rates would not be enough to keep the unemployment
rate from rising, and many economists predict the jobless rate will near 5
percent by year end.
While up from the 28-year low of 4.3 percent reached this spring, a 5
percent unemployment rate would still reflect a robust U.S. job market. In
fact, if the Asian slowdown had not occurred, many economists believe
the Federal Reserve would have stepped in to cool down a U.S. economy
that was growing too rapidly to keep inflation in control.
''As long as the Asian shocks don't upset the whole raft, the slowdown
will end up being helpful to the United States,'' said Joel Prakken,
economist at Macroeconomic Advisers in St. Louis.
But David Levy, director of forecasting at the Levy Institute in Mt. Kisco,
N.Y., is more pessimistic. He predicted Asia will cause a recession in the
United States either this year or next, largely because he sees Asia's
problems spreading to Russia, Latin America and other developing
countries worldwide.
''The world economy right now is very fragile and the problems in Asia
are going to take a number of years to resolve,'' he said.
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