This is a
decidedly anti-Kool Aid message from Bloomberg, which unfortunately intertwines with a lot of my "longer term" thoughts... as we move from "credit crisis panic" to "denial of recession possibility" to what comes out the other side. Again, we are an asset based, credit expansion economy - less and less of us "make things". So until our assets start reinflating (the biggest of which is our homes) we cannot once again repeat the credit orgy we just exited from. Or we could continue to go hat in hand to the Middle East and Asia where we send all our cash in return for goods/natural resources we need, and ask them to finance us even further then they already do (mostly with our own money of course). Maybe we can have telethons in Middle Eastern countries - "Adopt an American" - you know fund raisers to help us spend over and above our means... or as Hillary would say: It takes a village of Saudi oilmen to raise a bloated debt ridden American. ;)
- A normal U.S. economy is likely to look a lot different, and worse, after the credit crisis is over and financial markets settle down.
- Companies will continue to struggle to raise cash for expansion and innovation as investors and lenders remain focused on conserving capital.
- Workers, too, may have less flexibility to go after new opportunities, because many will be stuck where they are -- in homes worth less than the balances on their mortgages.
- ``Once you've made terrible, overly optimistic errors, that paralyzes you for some time,'' says economist Paul Samuelson, a Nobel laureate.
- The bottom line: The U.S.
The above story is the opinion of the author only and it does not reflect
iStockAnalyst opinion. Further, the author is not personally advising you
regarding the suitability of the story for your investment needs. In no event
iStockAnalyst will be liable for any loss or damage including without
limitation, indirect or consequential loss or damage, or any loss or damage
whatsoever arising from or arising out of, or in connection with the use of this
information. Please consult your investment advisor before making any investment
decision.
