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View Full Version : cycles, geographic dominance, credit derivatives...


scalf
10-08-2003, 10:44 AM
/images/graemlins/smile.gifgot lucky on one stock...hey, i'm an expert now...

for those involved/interested in bonds/credit/interest rates....; i would strongly suggest tavakoli's "credit derivatives and synthetic structure."....almost (for me) like epstein's "gambling and statistical logic"...a lot there...but not sure if i really understand it. take home message: large corp.s/banks do take huge risks in credit derivative markets...oh, yes, they do...lol.. /images/graemlins/grin.gif

globally, u.s. is about where britain was in 1930's....major economic force sinking....i feel that cucle is occurring where asia/pacific is coming into forefront:...hey, seriously, don't the japanese build better cars, even in the u.s.???..lol...what about electronics/tv's...lol...gety real......u.s. is fat/lazy/ over litiginous/ socialist state....in next ten years...progression to dominance goes to yellow/brown...

commodities will become more important/more effective wealth builders.....u.s. stocks stagnate/sink...

well; my fifteen moments over...belch...

dom tastes good even warm the next moerning...lol...gl /images/graemlins/smirk.gif /images/graemlins/wink.gif /images/graemlins/diamond.gif

Ray Zee
10-08-2003, 10:58 AM
finally the stars above have given you the perfect info for your post. who is your new soothsayer. i agree that we will be a sinking economy sometime in the future. our standard of living must also take a huge drop at some point . even if it is from china raising theirs. if they raise theirs ours must go down because we get most of our consumer goods from them. and those dollar store prices cant last.

Wildbill
10-09-2003, 02:40 AM
No way do I see the standard of living drop. The thing that sinks economies are not the issues most people think, but from being overprotective. It really is that simple, by continually moving up the quality chain and giving simpler tasks to others to do cheaply we do improve our standard of living. All the fools talking about how we are "overproductive" come on, that should make a normal thinker laugh! Imagine, "slow down, you are doing too good". Ok, whatever. This country is far ahead of the world and will continue to do so because the only way others will catch us is to emulate two basic principles.

First greatly follow and adhere to the rule of law and markets. Too many countries protect a few jobs to the detriment of many. Go to Mexico where people think the government should keep the oil in their hands. I ask people, why should it be that way if much of the money goes to corruption while you are paying 30-50% more for gas and electricity than Americans? All about pride and lousy economic theory. We run the risk of falling into that trap with this latest round of screw the Chinese and stop outsourcing jobs, but in the end I expect cooler and smarter heads to prevail. Bottom line is jobs that aren't justified being here only hold everyone back if they are forced to stay.

Second is to recognize your strengths. Ours are in services. Its nice to have manufacturing jobs, but mostly they are unjustified. Japan does anything to keep them, wasting the people's money to the tune of a staggering deficit. We still have pockets of inefficiency, this love affair with the family farm I just don't get. Maybe its our past, but we innovate and move forward better than most and farming would lead the way.

As for everything else, I can see oil prices being a bit of a problem, but I think inherently the world is too greedy to keep us out of our supply. It would be good if the country took steps to reduce consumption, but that is politically not feasible so I move onto other subjects. Liberal governments and taxes? Come on, we tax lower than most of the developed world. Not that we should just match them, but most people that complain about taxes being too high here should get a reality check and spend a year in France or Sweden. There taxes are real job killers, yet the people gladly pay them.

Ray Zee
10-09-2003, 03:34 PM
yea bill, but in other countries check out the services they get for their taxes. health care, maybe not the best. good roads and public transportation like we may never see.
still i like our system the best, but it does need major surgery soon.

our standard of living has to drop as the countries we import from get higher standards them selves. as the prices we pay for their goods will rise substantially. and the demand for ours will be less as they develop their own industries. our service industry will prosper up to a point. but it wont happen overnight, but i believe we are on the downside of being the worlds foremost superpower economically. not military wise yet.

Wildbill
10-10-2003, 01:19 AM
I don't think necessarily they have that much standard of living to take. What hurts poor countries most is corruption and business models. Just equaling some of the incomes in most poor countries would do wonders in lifting people out of poverty. Corruption is probably the worst scourge mankind has ever fought, yet its business as usual in most of the third world.

scalf
10-10-2003, 07:06 AM
/images/graemlins/confused.gifw.b...

and you are limiting your attack on corruption to the less developped countries????/ sure, no corruption in usa..???

suffering cognitive dis here..

gl /images/graemlins/grin.gif /images/graemlins/club.gif

AceHigh
10-11-2003, 08:29 AM
[ QUOTE ]
if they raise theirs ours must go down because we get most of our consumer goods from them. and those dollar store prices cant last.


[/ QUOTE ]

I don't know if that's true Ray.

In the early 1900's, Henry Ford started paying his workers a much higher wage than standard at the time. In short, it sparked a salary increase in the wages of the blue collar workers and allowed them to be able to afford cars. Cars that Ford would sell them. We might see a situation like that in China, if there standard of living increases. The new middle class of China might start buying computers and other finished goods from the US, benefiting both countries.

AcesUp
10-12-2003, 04:45 PM
[ QUOTE ]
It really is that simple, by continually moving up the quality chain and giving simpler tasks to others to do cheaply we do improve our standard of living.

[/ QUOTE ]

The problem is that we're not just "giving simpler tasks to others" anymore. We're farming out our technology and technology development; we're increasing the knowledge base of foreign industry, not just increasing productivity. This can be seen by the increasing number of white collar positions (IT, software development, hardware development, etc) being moved overseas.

Don't get me wrong...I don't think this is necessarily a bad idea. Ultimately, it will increase the standard of living globally. But, short term, Ray is correct -- it will decrease our standard of living here in the U.S.

If you believe in classical economic theory (I don't, but it will suffice for this discussion), once the barriers to entry for other nations is eliminated, the U.S. won't necessarily be able to compete in many industries where the products we develop can't stand on their brand. As more and more countries start to produce products substitutible with our own, prices will tend towards perfect elasticity, meaning that if we don't drop our prices to that of our foreign competitors, people will stop buying our products.

That means the U.S. has a couple of choices:

1) Prevent entry of foreign competitors into the market (i.e., government regulation of free trade);

2) Greatly improve domestic productivity (presumably by improving technology, which will ultimately increase the standard of living for a few, and decrease it for many more);

3) Drop our prices to compete (which will reduce our median standard of living in this country);

4) Significantly differentiate our products to remove substitutability (for example, Coca-Cola is obstensibly the same as generic cola, but the brand sets it apart).

While all four of these will continue to happen (and have happened since foreign trade originated), #2 and #3 are going to be more necessary in the global economy that is recently emerging. As such, our median standard of living is likely to drop (or at least level-off) in the near term.

Wildbill
10-12-2003, 11:50 PM
It has in general levelled off and isn't going up drastically, compared to the Chinese or some other developing countries. I don't think any of this necessarily will lower our standard of living as a whole.