Posted on 08/16/2007 5:12:29 AM PDT by SkyPilot
Just saw it on the news as second story after Peru earthquake.
Reporter said early overseas trends have analysts predicting this could be the 'worst day yet.'
Don't shoot the messenger.
(Excerpt) Read more at cnn.com ...
I have heard, sorry.
It is not clear that any amount of factual refutation could sway you from your attitude.
_________________________________________
You are absolutely right. When I posted my view I said it was gut feel, not analysis. That said, if you want facts, dig into the analysis of domestic manufacturing and see how well they handle foreign component value in the analysis of the value of U.S. domestic manufacturing. I think they work with gross income for the manufacturer, don’t think the manufacturers have to report or even track foreign component content . . . BUT I don’t know this.
I think that we have underestimated inflation because financial assets don’t factor into the analysis properly. People call inflation in assets a “bull market.” 1929. Huge asset inflation wiped out; depression (deflation) follows. With inflation it’s all a word game, what “counts” as inflation versus what is excluded. So any chart showing “real” growth is off, if the inflation number is off.
the truth is that Countrywide actually has less subprime exposure than most mortgage companies even though they are arguably the most well known.
they will suffer from that perception in this long overdue correction of optimistic lending and home inflation.
i for one am glad to see this now versus at a worse time for it
this was bound to happen.....no economy can thrive on housing alone.....this will be acute locally in communities where new home construction drives everything
around here in middle tennessee, the entry level homes are getting killed, the higher priced homes are hanging in there....i need a larger home, i would selfishly like to see an adjustment across the board
i expect our nashville urban condo glut to really get hammered with this too
this will affect my self storage businesses since this slowdown will mean less movers
That's because it is. :-)
Buy low. This is low.
International stock indexes and emerging markets indexes show there are fantastic bargains to be had.
EFA (Intl. Equity) - 72.56 (From 88.71 peak: 18.2% change), EEM (Emerging Markets) - 115.07 (From 144.10 peak: 20.1% change)
It's the 20% off sale!
The Fed has cut rates by pumping liquidity into the market, but they will not be cutting the 5.25% Federal Funds Sold rate at the next meeting - this is a short term problem - let the market take care of it.
Do you think that the insurance rates will drop now that real estate values are decreasing?
__________________________________________
I have no idea. The insurance co’s usually have to pay for repairs rather than a total loss after hurricanes in S. Florida (getting hit with water near the beach is where you can have a total loss), so off the top of my head, I’d say probably not going to come down much. For most except those on the beach the real risk is wind damage, not water damage, and water damage is where you get the destroyed homes. Where I live the homes east of the interstate have higher premiums because the risk of water damage is greater.
Also, since you are required to insure the mortgage, that doesn’t change either, the amount insured stays static, so the poor mortgage holders that bought high are really stuck.
Someone correct me if I’m wrong.
Yeah, that's what I did last week, but it was a mistake. I'm taking my ball and going home until September. August is wasted.
And if so, so what? You may -assume- that a final product with 90% foreign components and high-markup here is bad, but that doesn't make it so.
It doesn't make the final manufactured product any more precarious, or somehow ethereal.
Take a PC that has 90% foreign Bill of Matl content. Say all non-CPU components are foreign. However, 30% of the gross revenue is due to the CPU. And on that Intel/AMD cpu, those companies make 50% gross margin, while the chinese assembler ond other component vendors make 3% GM on their 90% of BOM.
Why is that bad for the USA engineering staff? Why is that product and productivity not real to you? Would it really be better to take that US capital and labor and manufacture the whole thing at 3% GM?
If you made 100% of the PC here, the plastic components would still rely on foreign raw materials like petrochemicals, which are constrained by world commodity pricing and cannot be compartmentalized into a protectionist-isolationist vertical production chain.
We’re manufacturing lots of cash. That counts, right?
Not bloody likely my friend. The market won't go above 15000 until after the 2008 election. And if a democrat is elected, it my be some time before that happens.
If we keep turning our food staples into fuel and we keep up this stupid trek towards trying to "cure" global warming, it will be even worse.
I need to go read something upbeat. Schopenhauer maybe.
They made fun of the low cc Japanese motorcycles in the 60’s and 70’s . . . but the low margin producers move into the high margin production. As that happens I think we will discover that the value added domestically wasn’t always or even mainly the US engineering, it was brand name and marketing, access to the US market. But when the US market isn’t as large, relatively, as it was because it doesn’t sit at the top of the food chain in as many industries as it used to, when the easy money game has played out and we’ve got huge entitlements AND huge debt from decades of debt financing, and an economy with fewer producers of goods . . . then the US market isn’t worth as much as it is now to the foreign producer, and he moves on to the thriving markets with his own high margin products. People that have real money from selling real things, rather than numbers on a piece of paper that is getting less and less valuable due to inflation. That sort of dynamic means our stock market goes down or putters around while we adjust.
Murky thinking maybe? I was an econ student as a young man, but the clarity of free market analysis is going to be tested by the current situation of the US. It doesn’t make sense to me to think we can add little value other than access to a market (that arguably produces less and less) and still retain the bulk of the profits. It doesn’t make sense that we can run 200 billion a year deficits for decades without inflation eventually happening. I think the inflation has been in assets. Hidden because it doesn’t go into the CPI. When the inflation moves from assets to consumer prices then all of a sudden all the happy graphs go down.
I think Fed will cut rates when unemployment reaches 5.0%.
It is a lagging indicator so the fed will be late as usual.
IOW, if it goes bad then it will be bad. We don’t need econ 101 to understand that!
The immoral cost of govt here is a problem. Deficit spending is a hindrance. Given.
But the cultural and totalitarian problems in China, for example, are also a huge problem for them.
Middle east has oil, and terrorism.
Russia has oil+nukes, and birthrate probs and alcoholism.
Europe has cache, and socialist spending drags.
Japan has manufacturing, and chinese and korean threats.
Korea has consumer electronics, and reunification threats.
IOW, every sector of the international game has potentially huge problems, too.
Given that, America’s prospects still look pretty damn good.
You don't mind if I bookmark this to see how well you do, do you?
20%-30% of nothing isn't much.
Bang on IMO. Let's starve the people to cure the planet of imaginary climate disasters.
Given that, America’s prospects still look pretty damn good.
____________________________________________________
Well, when you put it that way, I have to agree. ; )
And they are?....
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.