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What's your take on the current American economy?



January 13, 2009 – Comments (18)

What's your outlook for the economy over the next few years? 

I'm going to be on TV next week on this topic, and I already know my opinions and what I'm going to say. But I think it would be a neat touch if I were able to hear -- and perhaps even mention -- what YOU think, what YOU would say. And thus the purpose of this short blog.

If you were on TV next week, asked, "What is YOUR take on the current American economy and the outlook for the next few years?"... what would you say? And even more important: why.


18 Comments – Post Your Own

#1) On January 13, 2009 at 2:33 PM, kaskoosek (30.31) wrote:

Government does not have a magic wand to make the economy better.


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#2) On January 13, 2009 at 2:37 PM, starbucks4ever (79.83) wrote:

Will be fine 5 years from today. 

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#3) On January 13, 2009 at 2:41 PM, GraemesPSP (99.45) wrote:

One thing that is that it is no longer the American economy!  The global economy is so intertwined that most of the world is now going through the same cycles, booms and busts, at the same time.  This is a fairly significant difference between the current enviroment and previous recessions.  Normally when one country or region was going through a recession they could rely on other parts of the world to pick up the slack.  However at this time the world, for the most part, joined the boom together, and is partaking in the bust together, leaving no-one to pick up the slack.


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#4) On January 13, 2009 at 2:42 PM, snakeyd (< 20) wrote:

BS smoke and mirror capitalism along with government meddling has gone the way of the dodo along with carbon cap and trade.

Rebuilding comon sense infrastructure and industry.

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#5) On January 13, 2009 at 2:46 PM, ocsurf (< 20) wrote:

Real Estate prices will continue to decline at least another 20 or 30 percent or even more in the next 2 years.

The current US stock market averages (Dow, S&P and Nasdaq) reflect manipulated information, and is being kept up by artificial means.

For all practical purposes the US dollar is in the process of being turned into Confetti.


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#6) On January 13, 2009 at 3:10 PM, WeenTang (29.79) wrote:

Just like all knee-jerk, extreme government over-reactions, the future of the American economy will depend on the unintended consequences of the trillions of dollars in bail outs. 

 What will these unintended consequences be?  I have no idea, no one does.  That's why they are unintended.  But I've got to believe all this debt is going to have serious repurcussions and leave us exposed to other threats no one is thinking about.

But screw it, we wouldn't want to hold anyone responsible for their irresponsible debt/investment decisions.

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#7) On January 13, 2009 at 3:21 PM, gembree (99.62) wrote:

On January 13, 2009 at 2:37 PM, zloj (< 20) wrote:

 Will be fine 5 years from today.

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#8) On January 13, 2009 at 4:09 PM, columbia1 wrote:

Inflation, hopefully not hyper inflation. I worry the fed, scared of deflation and the excess spending coming in the next two years, coupled with low interest rates being held for too long of a period of time will result in inflation. I also agree with WeenTang comments!!

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#9) On January 13, 2009 at 4:17 PM, BlueLakeVentures (< 20) wrote:

It will recover in Q4, when real estate bottoms.

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#10) On January 13, 2009 at 4:23 PM, motleyanimal (36.15) wrote:

The TARP bailout is not much more than a financial pooper scooper.

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#11) On January 13, 2009 at 4:53 PM, Imperial1964 (93.41) wrote:

My thoughts:

How the recovery goes depends on from what perspective you look at it.  As both an investor and an employee, my answers diverge depending on which "hat" I'm wearing.  Much of the equity and bond market damage has been done.  Layoffs are in full swing and will continue.  An awful job market will be one of the big stories of 2009.

From a perspective of GDP, things won't recover quickly.  But at some point in 2009 things will stop getting worse.  Eventually we will pick up the pieces and start recovering, with new obstacles along the way.

I'm concerned we may hit a second recession right after this one if certain problems are not addressed.

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#12) On January 13, 2009 at 7:22 PM, abitare (29.51) wrote:

The more the government "helps" us the more they will be hurting us.

It is about government spending. The issue not addressed, what is the government spending?


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#13) On January 13, 2009 at 7:51 PM, iamnik77 (90.71) wrote:

Globalization will not be a good thing for the American worker. It may be good for Indian and Chinese workers but not for Americans. From an inflation adjusted perspective, the American consumer will have less and less money to fund consumption. Corporate earnings may grow but the historical seven percent earnings growth will be a stretch. Four or five seems more like it. If it is any higher, it will be because of runaway inflation. However, despite the gloomy prospects, our stock market will still have some good horses to bet on and I will continue to look for outstanding stock investments.

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#14) On January 13, 2009 at 10:46 PM, devoish (65.42) wrote:

 "What is YOUR take on the current American economy and the outlook for the next few years?" 

If we deal with reality, the economy will be just fine.

Address the real problems. Forget about growth and focus on maintainance. There are hundreds of superfund sites that have been neglected and still need to be cleaned. Fund the EPA to do it. Tax the industrys that polluted. Address the issues of declining fish stocks. Address Colony Collapse Disorder. Bring computers to schools that cannot afford them on their own, and get class size smaller with the goal of being halved. Stop building houses we do not need in deserts without water. Encourage (force) local Gov'ts to consider where the water is going to come from for "growth", before more of the worlds declining forests are needlessly destroyed to build empty houses. Cut the tax breaks for drug company R&D and fund research directly from taxes (we already fund more than half of research directly from taxes). Drugs developed from tax funded research could be made available for cost of production. Sorry investors, but grandma means more to me than profits or capitalism does. And I am long Excel. Get serious about food and drug quality. These are all opportunitys that capitalists have missed for twenty years. I could go on.

Capitalists are the best and brightest they brag, so regardless of what Gov't does they will excel. Don't worry about them, take care of our kids. Understand that we are facing a future of declining resources. Among all the discussions of Mises or Keynes or Austrian economics that I read here, no posts suggest they understood that as anything more than temporary. Friedman did. His answer of encouraging aggressive greed to decide who succeeds will fail miserably over a few generations unless enough truly creative people are born to privilege.

JMHO and all that.

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#15) On January 13, 2009 at 11:16 PM, mrindependent (35.24) wrote:

The current recession is deeper than the stock market currently believes and the widespread damage will not allow a quick recovery.  The return of an FDR style government is a negative development because private industry will be crowded out by wasteful government spending.  Within 3 years the United States government will face a significant debt crisis as result of lower revenues combined with shortsighted stimulus spending.  Aside from the damage caused by the upcoming debt crisis, the nation will have to contend with permanently lower growth as: (1) demographics change to an older population and (2) the world economy struggles to employ 600 million rural people in China and India.  Considering these people are every bit as capable as Americans and they work for one tenth the cost, it is obvious that employers would rather employ them than us.  The best things we could do to offset these problems as much as possible are:  (1) significantly increase immigration (to get young workers) (2) balance the budget, which would significantly reduce our trade deficit and (3) allow the dollar to decline as much as possible (also to reduce our trade deficit)

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#16) On January 14, 2009 at 1:23 PM, BigFatBEAR (28.28) wrote:

Addressing debt like the problem it is = short term bearish, but long term quite bullish.

Ignoring problems, hiding them, taking the easy way out, or continuing to do what we've been doing = short-to-medium term bullish, but long term quite bearish.

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#17) On January 14, 2009 at 1:32 PM, socialconscious wrote:

 kaskoosek (99.44), ocsurf (< 20) zloj (< 20) wrote and all got it right and paraphrasing would be wrong. I have nothing to add unfortunately except guarded optimism. All Best Social C.


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#18) On January 14, 2009 at 3:56 PM, XMFBreakerTAllan (99.73) wrote:

No one can predict the shape of the economy or its direction.  I do think we will see financial institution reform and different business practices in that industry; but that won't change the fact that we grew too fast too soon.  Isn't that always the story though?   And we always have done so in the past.

 I would say that we will see events occur that affect the economy in ways that we wouldn't expect.  Isn't that always the story though?

As for being an individual investor in this economy, this is the best time to be investing.  We will be able to see which companies have the best management and the best business models that will succeed during this recession - and that will allow us to invest in those businesses.  And we can expect that those companies will do more than succeed when the recession ends; they will exceed. 

 T. Allan

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