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The Economy, stupid


NorthSideSox72

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QUOTE (Cknolls @ Jun 26, 2008 -> 10:55 AM)
As I said a couple of days ago, GM is a dead man walking. Its debt is trading at 15%, so its effectively cut off from the credit markets.

Here is an interesting thought... what if GM, the largest US car company and at one time one of the largest businesses on earth, gets bought by a foreign company? Or merges with one? I think that's not outside the realm of possibility now.

 

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QUOTE (southsider2k5 @ Jun 26, 2008 -> 11:29 AM)
You think the Congress went protectionist over the Ports, wait until they try that...

And because of that, as well as debt and value considerations, I think the more likely path is that GM will sell off a lot of bits, try to thin down, and re-invent itself.

 

Of course, that won't succeed as long as they have those labor contracts hanging over them. That's where merger or sale to a Japanese firm would help out.

 

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QUOTE (NorthSideSox72 @ Jun 26, 2008 -> 11:32 AM)
And because of that, as well as debt and value considerations, I think the more likely path is that GM will sell off a lot of bits, try to thin down, and re-invent itself.

 

Of course, that won't succeed as long as they have those labor contracts hanging over them. That's where merger or sale to a Japanese firm would help out.

 

Pretty much if they look at bankruptcy, those contracts are done for anyway.

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QUOTE (southsider2k5 @ Jun 26, 2008 -> 11:56 AM)
It makes sense. It takes all power away from the unions, and it would pretty much mean Ford could do the samething.

I've been waiting for one of the "big 2" to jump in. And GM is more likely then Ford at this point because of the other investments GM has.

 

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QUOTE (BigSqwert @ Jun 27, 2008 -> 07:44 AM)
I'd expect a lot of the crap we import from China to start shifting back to US manufactured goods. Transportation costs are soaring.

 

Its all a part of the master plan... We are taking down China's economy, and we are all witnesses to it.

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QUOTE (southsider2k5 @ Jun 27, 2008 -> 08:48 AM)
Its all a part of the master plan... We are taking down China's economy, and we are all witnesses to it.

If the US and/or Europe can make serious ground in the next 10 years towards non-fossil fuel energy, then the RIC of the BRICs will be in serious trouble economically.

 

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QUOTE (BigSqwert @ Jun 27, 2008 -> 07:44 AM)
I'd expect a lot of the crap we import from China to start shifting back to US manufactured goods. Transportation costs are soaring.

 

 

QUOTE (southsider2k5 @ Jun 27, 2008 -> 07:48 AM)
Its all a part of the master plan... We are taking down China's economy, and we are all witnesses to it.

I wonder if we caught China at our game, greed. We gave them a taste, and now we're driving them right out of the market. However, they still hold all of our debt - so I wonder how that all balances out?

 

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QUOTE (Rex Kicka** @ Jun 27, 2008 -> 08:05 AM)
And seriously hurting ours in the process, no?

 

Yes, and no. We have a much more resiliant middle and lower class, which can absorb this much better. Its pure conjecture on my part, but we did this to the Soviet Union in the early 80's (it was one of the things Reagan was most proud of when interviewed later) and Japan in the late 80's. Plus we had to do this to keep the economy from completely falling apart mentally. We basically are exporting our way out of the recession. I said 6 months ago we would never seen an official recession because of that, and it seems like that is coming together.

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QUOTE (southsider2k5 @ Jun 27, 2008 -> 09:19 AM)
Yes, and no. We have a much more resiliant middle and lower class, which can absorb this much better. Its pure conjecture on my part, but we did this to the Soviet Union in the early 80's (it was one of the things Reagan was most proud of when interviewed later) and Japan in the late 80's. Plus we had to do this to keep the economy from completely falling apart mentally. We basically are exporting our way out of the recession. I said 6 months ago we would never seen an official recession because of that, and it seems like that is coming together.

But there's one problem with that, and its a key difference between the US economy now and the US economy then. There is simply a lot less manufacturing going on here now. Therefore, there is a lot less bandwidth in terms of production increases for export. So I think that's limited.

 

Yet again, this tells me we need to get to the forefront on renewable energy and start exporting those technologies.

 

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QUOTE (NorthSideSox72 @ Jun 27, 2008 -> 08:39 AM)
But there's one problem with that, and its a key difference between the US economy now and the US economy then. There is simply a lot less manufacturing going on here now. Therefore, there is a lot less bandwidth in terms of production increases for export. So I think that's limited.

 

Yet again, this tells me we need to get to the forefront on renewable energy and start exporting those technologies.

 

Being an information soceity, we are a lot less vulnerable to commodity price shocks than we were even a generation ago. Places that are huge net exporters to us are going to get killed in this current enviornment, because of the lower dollar. They are also getting murdered on the capitol end of things with the record commodity prices. The big red flag to me was China raising fuel prices dispite the riots and problems going on there. The government is having big problems fiscally, i would bet on it.

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QUOTE (southsider2k5 @ Jun 27, 2008 -> 07:01 AM)
Being an information soceity, we are a lot less vulnerable to commodity price shocks than we were even a generation ago. Places that are huge net exporters to us are going to get killed in this current enviornment, because of the lower dollar. They are also getting murdered on the capitol end of things with the record commodity prices. The big red flag to me was China raising fuel prices dispite the riots and problems going on there. The government is having big problems fiscally, i would bet on it.

Of course they are, they've accumulated a couple trillion dollars or so in U.S. dollars that have had their value plummet.

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QUOTE (southsider2k5 @ Jun 27, 2008 -> 10:01 AM)
Being an information soceity, we are a lot less vulnerable to commodity price shocks than we were even a generation ago. Places that are huge net exporters to us are going to get killed in this current enviornment, because of the lower dollar. They are also getting murdered on the capitol end of things with the record commodity prices. The big red flag to me was China raising fuel prices dispite the riots and problems going on there. The government is having big problems fiscally, i would bet on it.

I pat myself on the back for actually being able to understand this post

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Part 87 of I don't understand why the oil shock is fundamentally based.

 

Oil is expensive to store and oil stockpiles remain relatively static historically. If as I read in Slate yesterday, we can really only store about 55 days worth of oil, and the supply of oil hasn't diminished, why is there a fundamental reason for such a large shock in oil?

 

 

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