Could Things Be Perking Up?

Yep, it seems like things are perking up, at least locally in my world.  I see people returning to restaurants and there’s a lot to traffic around my local strip malls.  I’m also getting some activity job wise.  I don’t have a job yet, but at least I’m now getting some promising phone calls and e-mails from actual companies instead of hungry head hunters.

I’ve been discussing the matter of optimism with friends, family, and acquaintances and we all agree that if we believe things are getting better, then we will act like things are getting better.  If a whole bunch of people start to believe and act this way, then things will improve.  Basically, it’s a self fulfilling prophecy.  So let’s be optimistic!  At the same time we need to temper our optimism with reality and pragmatism.  I would hate to see ourselves in a spending frenzy that leads into another bubble-bust cycle.  I think, though, we as a people have learned a lot from the boom of the last 25 -30-years and the bust of the last 2-years.  The old saying “if it looks too good be true, it probably is” has been reinforced.  Also, I think sudden poverty has taught a bunch of us spoiled folks that we need to save and that we are not entitled to stuff and jobs by virtue of education and our parent’s middle class social and financial standing.  On the flip-side, I think we all woke up to the reality that middle class people are not “rich” and that we can become quite vulnerable within a day.    I think the gap in wealth and power between the middle class and wealthy was made very clear in the last year, and as such, has put a lot of middle-class people in their “place.”

I think this bust has brought back a powerful spirit of America and what it means to be “American.”   We aren’t islands onto ourselves and sometimes we have to share for the common good.  I must say, even though times are tough, the progress we are making to become better people, improve our country’s infrastructure, and be better world citizens makes me feel proud to be an American.  I am inspired by our perseverance and our inventiveness.  I do believe the US will rise out of the mess stronger, more benevolent, and more respected than it’s ever been and I look forward to the changes ahead in the next few decades.

DOW drops below 7000

So what I’ve suspected seems to be coming to pass. The past 20-years have mostly been hot air — people playing the stock market and trading houses like Pokemon. It’s only been recently that I’ve begun to pay attention to the economy and business matters and it shocks me how much of the US economy and the world economy in general is run off of debt trading. The problem has always been as companies and banks trade debt for increasing margin, no one ever questions who at the end of the chain actually has the tangible “money.” Of course this leads to the creation of the illusion of having money, but in reality it’s just that — air and a figment of everyone’s imagination. So in the end, we are left with that original bit of money that was first lent out and leveraged to 30x its value. We are seeing this now the stock market falls to late 80’s values as the air is let out of the balloon.

It also amazes me that the US could keep consuming despite the fact that we make less and less to actually trade. We traded the “US brand” in terms of debt notes for goods from countries like China. Hahaha! But it all falls apart as soon as somebody really wants their money. The world has come together to build this sand castle and we struggle against the rising tide to add more sand to the castle before the waves wash it away. And again I ask, what are we as the US going to give our debt owners when they want their money? And if we owe more than we have, then do we give the country over to debt holding nations in Asia and the Middle East. It’s a HUGE national security problem!

The way I see it, current government intervention is just drawing out the pain of an eventual collapse. I’m sorry but the gig is up! The illusion is broken! Granted the US has made great strides in IT and biotechnology and those assets should be worth something. But the rest of this BS nonsense — insurance to insure insurance and trade based on brand identity — is now starting to bear its ugly fruit. It’s Enron all over again — selling futures on the weather and valuing assets at what is hoped to be the value in the future, rather than their real value right now. It will now all return to its initial value plus those real gains in technology, medicine, and the like. We must now return to actually making things to trade and in an economy based on actual trading, you can’t expect people who have no jobs to buy goods. So here’s the deal — it’s great to be global, but if you are going to sell goods in a country, people of that country should be employed to some extent to make those goods. All other countries seem to understand this. This is why when US companies try to sell in foreign countries they must make the product there to avoid tariffs and high taxation. This is further extended by the fact that the companies must form join subsidiaries with the host nation’s governments. The US does this with foreign automakers, but in private industry. So why not do this with everything else? Companies scream “protectionism.” And I understand why now. It’s because a global company is not beholden to any state. They are beholden to their shareholders to pay back the greatest dividend regardless. I don’t have a problem with this as long as everyone understands that global companies are “nationless.” However, if a country is counting on that global company to provide jobs — then we have a problem. Case in point IBM which is trying to start a “brain-drain” from the US to India so they can pay lower wages, thereby increasing share holder value. There is no allegiance to the US and you could even say that actions like this hurt the US. The question is whether the US cares when things like this happen. Is it wrong for the US to protect its economic security? Believe it or not, companies will figure out a way to make money, so in this global economy, there’s no harm in saying American products for Americans — it doesn’t bar any company from coming into the US and employing US workers to make products for the US. It doesn’t bar trade either. Each country is blessed with different resources, so we must trade to distribute those resources. This gets back to the simple fact that trade is a two-way transaction and the sooner we get back to that fundamental principle, the sooner we as a planet can get back on track.

Satellite Images of the Inauguration

Here are some cool photos of the inauguration that were posted to CNET.  It’s pretty incredible considering how big the DC Mall is.  Here’s a link.

Economic Crisis Fatique

I hate to say this but I’m tired of hearing about the US/World wide economic crisis.  The whole thing has become so big that it’s become almost meaningless.  I feel like the underlying truth is the the US is bankrupt, but if that was ever admitted then this whole sham would fall leaving us with the unknown.  What blows my mind the most is that it seems the govt’s solution is to print more money — and yes, that’s what this $700-billion “loan” amounts to since there’s no new asset to back it.  And then Wall Street goes nuts about the plan one day and then after thinking about it, sags the next.  And then none of what’s proposed will help anyone who is about to lose their house.  I’m exhausted by it all.  I’m exhausted because it’s frustrating because I can’t do anything about it other than exercise my vote and hope that the next set of governement officials is smarter than the current set.

So what happen to the idea of the “Jubilee?”  You know, every 75-yrs, all debts get erased and everything gets reset.  Hahaha, of course, there’d be no point seeing as how the folks that got us into this mess (everyone) are always looking for a way to game the system … sigh … In the end, I guess this more of a social problem than a money problem.  Everyone likes the ride up, but nobody wants to pay for it in the end.  So tired … I wonder what it would be like if it all went to heck.  Strangely, enough, thinking about the idea of a Jubilee, our crisis now closely coincides with ~75-yrs since the melt-down of 1929.  Hahaha, … maybe the idea came from the natural cycles within human society.  You know, about every 75-years, the slate needs to get wiped clean because that is how long it takes for economies to expand and then go to heck due to corruption.  I’m glad the FBI is now involved.  Perhaps their presence will contain potential schemers from acting now.  $700-Billion is a big chunk of money, even if it’s just printed paper.  I’m sure various parties are thinking of ways to get their chunk of the bonanza.

Toyota Shifting Production in the US

Here’s an interesting blog entry from CNET about how Toyota plans to make Prius cars for the US market in the US while cutting production of large trucks and SUV’s to meet the changing demand of the US auto customer. There are a couple of things I find interesting about this.