It's the Economy, stupid - Languishing & Lingering after the Great Recession

I agree with the article below...

That while the fundamentals mostly look good,
The numbers on the board mostly look up
Companies are making profit

The lingering notion...and the media hype on "maybe's" and "what if's" or anything remotely negative or even slightly down trending for a brief time...
has accumulated a certain mood ...as if we are suffering from Post-Tramatic Stress Syndrome economically.

There is no willingness to commit to a long play...a risk...increased payroll
And so, unemployment continues to plateau
Real-estate hasn't recovered fully
Consumers aren't purchasing as they were...

It is the media's fault?
The politicians' lack of drive in getting anything done? (other than posturing...)
Company Executives paranoia?
Europe's inability to get its act together?
All of the above...

I've been noticing this myself...how do we truly reboot?
Kick ourselves in the pants?
Get us out of this miasma...malaise...molasses (and other M words...)

 

Maybe that's the thing. We've gone beyond rapid change, and therefore rapid growth. The world is getting smaller, or has already gotten smaller. Maybe it will get way more smaller yet.

Maybe we have outgrown growth. Are we headed to a new economic epoch?

"Growth for the sake of growth is the ideology of the cancer cell."
—Edward Abbey

Life after the end of economic growth | Richard Heinberg | Comment is free | guardian.co.uk

A 20-rule manifesto for New No-Growth Economics - MarketWatch

Or maybe this is the quiet before the next storm. Maybe breakthroughs are on the way. Let's see what China does. They will lead the way.

 

You know what? I just don't buy the argument - that the great recession is over and we're the only things stopping ourselves from kicking it into high gear. I think the real problem is that the recession transitioned from a brief national problem to a far-reaching global depression. It bothers me when the news claims we're back to business as usual. We are not. There are some sectors of the economy that are improving, which are more reliable for investors, but daily life is changing fundamentally for the vast majority of the middle and lower classes. People are still losing their homes. Loans, whether for starting small businesses, or purchasing a home, are hard to obtain. People in my generation are underemployed, if employed at all -barely scraping by and unsure of the future. Baby boomers who are parents of uner-employed 30-something's with young children are spending what little retirement funds they have left and refinancing their homes (if they haven't lost them) to buy food for their children and grandchildren. Safety nets are being eaten away with little chance of rebuilding. Things are bad here. They are worse elsewhere. But things aren't going to fix themselves overnight. I'm sorry, there aren't cautious investors hiding at the end of a rainbow with their pot of gold, waiting to pop in and toss their money around as soon as we shake off our shell-shocked state. They lost everything, too, remember? Even making cautious minor investments with what little funds they have, it will take them a long time to build up their stores to the point where they can ride in on their white charger and save the day.

Anyone who says the economy is on the upswing needs to check their optimism against reality and stop getting people's hopes up. Sure, in some isolated areas things are improving. But the overall picture is far more bleak than people are willing to admit.

 

Well, under normal circumstances, the recovery would have been well under way by now. For many, it has been, but for most, not so much.

It's like a prolonged trough rather than an actual recovery. Why is that? Well, for starters, these aren't normal circumstances, because this wasn't a normal recession.

As far back as a couple of years ago, Krugman pointed out the problem of much of the developed world being in a liquidity trap: How Much Of The World Is In a Liquidity Trap? - NYTimes.com

More recently, German economists are reaching a consensus that that is indeed the case in the Eurozone: German economists see eurozone in liquidity trap - Globaltimes.cn

You don't hear about this kind of thing in mainstream media, which instead tends to focus on jobs, taxes, deficits, interest rates, and how much money the government is printing.

What is a liquidity trap? It's when people hoard money. It makes it so injecting cash into banking has little effect because people don't want the cash. It's a lack of aggregate demand.

The problem today is that those with money aren't spending it, and those without it can't. That grinds things to a halt.

What to do?

How about get off this idea that tax cuts are good and stimulus spending is bad?

That's a short-sighted view. The rich got richer (again) and now the wealth is trapped, and we're all stuck.

 

So basically the problem gets down to this, in simplistic terms.
Shit or git off the pot.


People & Management need to reboot themselves...and start making moves again.
Commiting to something.

 

So, it comes back to this...
Is it "Much to do about Nothing"??

Is the media hyping up something that really isn't an issue??
Say it isn't so...they've never done THAT before.

But, it looks like it will get figured out...one way or another.
So stop making the birds sketchy.
Meaning corporate management, so they'll stop sitting on the fence and start seriously hiring needed people. (hey, even training them...)

For all the "fiscal cliff" bullshit (great byline), the fundamentals are good and things keep trending up...bit by bit.
Not freight-train fast...which would likely indicate a bubble and irrational exuberance in the long run...but more like a decent marathon pace.

The US and Canada in comparison to Europe, Japan and BRIC is doing decent.

 

So, is the U.S. going to actually going to be intelligent...and leverage new resources for revenue, infrastructure and transportation?

Or are we simply going to let Big Energy stuff their pockets?

We've hit the lottery again...are we going to give the ticket away?

 

This has been a long time coming. It's a concern here in Canada because it means we'll lose oil exports to the U.S.

The resources are there. But, as always, it comes down to government and business.

 

hmm...I didn't even consider that Canada may be adversely affected,
I'm like most Americans thinking that our exports mostly come from the Middle East and some from Venezuela.
But the oil trickles in from everywhere.

But not only will the US import less, but Europe has more options...Russia can't leverage theirs as much, nor can Venezuela either. Not as much bullying.
The Middle East may become even more unbalanced, with the flux of money coming in becomes less so...aggravating what % gets to the masses.
This may even be true in Africa, where some nations also leverage their oil/gas resources.

I think we're going to see a big transition here in the next few decades...both good & bad.

 

Not everywhere is a trickle. More than a quarter of U.S. oil imports come from Canada, its single biggest source. It's a single non-OPEC source that amounts to over 65% of total OPEC sources.

Other large non-OPEC sources include Mexico and Colombia. There are some opportunities in Brazil as well.

For more than political reasons too. I think the technological and economic challenges are great.

 

Well, I didn't mean truly trickle...perhaps "flow" would have been a better word.
But I wasn't aware of the true numbers, so thank you.

But I don't think Canada is going to potential become explosive as other places may.
It's government and culture is fairly stable, modern and progressive...so they'll adjust if needed, with some pain perhaps, but even so.
I don't think its going to change your nation's politics or heart, which should be commended.

But other nations are more susceptable to changes in their resources and the gains that it has gotten from them.
The loss of that can trigger political and cultural changes...even as gaining it did.
It is something to be wary of.

It would like a loan officer who is used to a client who borrows from them often...and has moved up in ranks,
then having the same client all of a sudden come into a large amount of money...and pays off the loans and needs no more...for at least a long while.
That loan officer will have to make a quick adjustment, get other clients and it won't be as easy to make their numbers as before.

So not only will the US leverage their new resources...but as you said, as it learns to utilize and profit from new tech, that previous need will go.
It makes a slight difference in your budget and ability.
And whether the other nations like it or not, America's addiction has been a benefit for them for some time, it does make a large wave.

It will be interesting to see what happens when the Addict becomes the Dealer.

 

I thought you might have picked up on this, rogue49

Did this show up on your radar? What do you make of it?

Reshoring manufacturing: Coming home | The Economist

 

Yes, thank you Baraka_Guru, I've been catching articles like this for the past year or so.

And I've actually experienced first hand, not just in manufacturing,
but even in the IT sector and customer service.

There's a variety of subtle factors going on.
At first, companies only looked at the direct immediate pay ratio.
But that's the easy number...they forgot to look further and deeper.

First, because as more money came into the countries,
those same experienced their own expansions and increases in cost of living and pay expectations.
This ended up pushing up the pay...so much for saving.

But add, increased taxes, regulation, shipping, etc.
it's what they describe here...

But there's also a underlying difference in communications,
ability and "leap on it" attitude...or even "thinking out of the box"

In past manufacturing, I noted that my team in San Paulo, Brazil would not be in sync.
They'd say they're coming to meeting, then not show up
Or agree to plans...then just do their own thing, badly.
I didn't get this with my American, French or Canadian teams.

In recent operations, my Shanghai component was supposed to be Tier 3 capable.
But they only knew what they knew, no more.
They were very talented and quick on well practiced and routine...
but called for help at a drop of a hat on new items or improv.
The American team had a "leap on it" attitude...get it up, keep it up, keep on it.
And god forbid we asked Shanghai to do anything off-hours. (It was a 24/7 environ)

India had some difficulty in very heavy accents and phrase translation.
Through no fault of their own, they were diligent and polite.
But communications with clients, they weren't received well,
nor could they get some of the local syntax or context.

And sometimes with other nations, in higher skilled levels and mgmt,
there seems to be a "class" factor. Where they won't react well to those experts not of the same rank.
While the person was skilled and experienced, the other countries' reps aren't receptive to opinion or suggestions.
Here in America, Canada and certain other nations, it's a true merit system.
They are more likely to listen to those who know what's up.
And they feel inclined to offer their insight when something's wrong too, even if it up higher.

All these subtle soft skills and other cultural factors are now adding up.
Where it turns out the over all "total cost of ownership" came into play.
What was the LONG-TERM result and trend??

While I do believe that these nations will come up to spec in the long run,
there is something to be said for top player nations' dynamics and attitude.
In America, Canada, Australia, France, Germany, Japan, etc...
As they say, "you get what you pay for..."

I'm not biased or bigoted...just being real for at least the relative short-term.
Business is business...and if they want to play with the big boys,
then you got to play on the same level, have the same attitude.
And there is something to be said for clear communication.

I hope they can get it to that level.
There will be a benefit for their country.
America itself gained when it adapted some of Japan's practices.
There are always cycles everywhere.

However, we in turn have to figure out the opposite.
How to relax and do well at home...I'm trying but it's hard to let go.

It's a hard lesson for business or politics, not to make the "easy" call...but to consider ALL variables.

 

If the cry among businesses is still "uncertainty," I don't get the disparity between that and the current bull market cycle.

 

That's not true. (I went to business school and I'm an editor of business and finance books.) I'm talking about this "uncertainty" you mention. Why is the market bullish if there is uncertainty?

 

Ace, do you smell the bullshit you are spouting?

The drag on the economy is no fault of the government, but it is the fault of economy's owners...business.
Sure, the government may make a bad or good policy or two...but in the end, an addict needs to own their own addiction,
the actions, lack of actions and the consequences.
There was a bubble, there was abuse, there was neglect...the bubble burst, there was pain, in all directions.
And then sure, the government makes some good & bad moves...but in the end, it was up to the businesses to slowly repair themselves.

You can't have it both ways...say the prez has no biz in the economy and doesn't control it...then blame them.
If anything it's static Congress which has direct votes and affect which can be attributed any blame.

So, it's about those in business doing the right thing...and doing it one their own.
Sure a parent can coax & guilt, but it's up for the adult to wipe their own ass.

I'm a businessman and certainly not a liberal...but I can call out a bad decision and result by business leaders too.
This is not a fuckin' sports game where you pick a side and root for it. Them bad, Us good...forever.
There's good business, there's bad business...and that's business. And business fucked up...and they fucked up the economy too.

The Obama administration has only truly done what it truly has control of.
Defense, Executive, Trade.
Period...it's in the Constitution.

I'm tired of this "liberal" and "conservative" name calling bullshit. Rooting for sides and ideals like they are holy symbols.
It's time for practical, pragmatic...do what's fuckin' right.

And if you don't like it...then get the damn GOP to stop putting up pathetic candidates. And I'll vote for them if they're good.

In the meantime, become a part of the solution....not the whining and screaming.
Suggest some true economic perspective, observations and potential solutions.

Because if you HATE what Obama is doing, then you're in trouble...because it seems to be working.
Unless you're going to dispute the upward trends and numbers I'm seeing right in front of my face.

It's time to stop the spats ...and back & forth.
I want action.