Similar to theGreat Depression?

I am posting a nice piece the compares our stats to date to how thing went in the Great Depression. This piece looks back in time and looks at how well we have done to date. It does not look to the future too much. It notes how our current financial stimulus is different from what was done then. Different yes, better? You decide.

http://www.voxeu.org/index.php?q=node/3421

That Birth - Death Thingy!

Here is a post on how some of the recently released numbers continued to be cooked a bit.

http://www.nakedcapitalism.com/2009/06/guest-post-payroll-data-mixed-despite.html

I am zoning right now so I will not give my own take on this. Hopefully this weekend I will catch up on reality. Which will be way ahead of most others, so I can take my time.

Disclosures: None.

Time To Bargain Hunt

This is brilliant. United is doing competitive bids for new jets just when the sellers are desperate for orders.

http://online.wsj.com/article/SB124408456205084093.html#mod%3DtestMod%26articleTabs%3Dcomments

Now is the time to buy - if you can. Let me emphasize the last part again - IF YOU CAN. I realize that not everyone or every corporation can pay for or finance any big purchases right now but that is exactly what any corporation or individual who can should be doing. I am not recommending buying things not needed but now is the ideal time to buy things that are needed, individually or corporate wise.

Just a thought. I know people are looking at stocks being cheap and a good investment, but it is a good time to think outside that box on other things you might need now or in the future - if you can afford it. Good luck.

Disclosures: None

Back From the Great Wall

Let me preface this post with the fact that I have spent 28 hours traveling, I just had a couple of glasses of wine, and I am zoning - just a bit.

I have not had time to read up on financial matters, so I want to spend this post updating folks on my observations of China. I was there four years ago and again now, so I will focus a bit on the contrast:

• When I was there four years ago I went to three major cities. I began in Beijing. This was three years before the Olympics but I did notice things seemed to be evolving towards that event. Either way, I mentioned at the time that the national bird must be the crane, as in the construction crane. Cranes were in every view from every angle and buildings were going up everywhere;
• This time I saw a lot of cranes but most were just there not moving. A lot of major buildings seeming under construction but no activity. I noted that most of the scaffolding for sky scrappers - 50 floors plus - was bamboo, and had to wonder just how strong it is.
• Especially in Beijing it seemed that a lot of the old had disappeared over four years. There are a lot of new buildings up and a lot more under construction. The old shops and homes are quickly disappearing. Our guide noted that the older homes had almost disappeared in the last decade and most that remain are now regarded as historical landmarks.
• I saw a lot more Chinese people with money. I was at nice hotels and ate sometimes at the hotel restaurant. It was expensive by US standards, yet is was packed with wealthy Chinese.
• It seems the wealth disparity visits all countries

And now let me tell you some less financially oriented observations:

We were in Guangzhou to adopt but while there saw a lot of people, adults, playing at the play area and working out. This seemed to be a children's playground, but it was for the adults. They played there aged 2 to 90 (yes,90 and above) and they all had fun.

Despite all the progress I observed, toilets are still hit or miss. Even in nice venues, you get their squat toilets and commonly no toilet paper. Squat toilets, in case you are wondering, are holes in the ground. Sometimes they are glorified porcelin holes that actually flush but they are still holes in the ground that you squat over.

Still, in some respects I believe China is well ahead of us. They are very good on conserving paper. I am certain they do it for economic reasons and not environmental, but nonetheless they put us to shame. Now I am not a fan of no toilet paper, but there is something to be said for getting a small napkin or even just tissue to wipe your face at dinner. Even having tissue instead of paper towels in the bathroom makes sense.

I have a lot more observations and will add them as time goes on. I am a bit too tired to pass them all on right now. And I need to play with my son. Did I mention, I came back with the most wonderful two year old boy. And that, my friends, is yet another story.

Disclosures: None.

Heeellllooo from China!!!

This is my first and probably last post while visiting China.  The internet is censored and I am unable to read my own blog (directly).  I have a way around it, but we will keep quiet on that for the moment.  Most of the blogs I follow are also blocked and working around the blocks is a bit slow and cumbersome, so I am a bit economic news deprived.  Just as well, two little ones to keep up with here.  The youngest is taking a nap, which is giving me time to slip this in.

I see the markets ended May with a last minute"everybody in the pool" event.  I guess that solves it, recession over.  I can now shut down my blog and wait for the next economic crisis.

Unfortunately,  I think that would be a tad premature.  Think about it, the governments around the world throw a few trillion dollars at the crisis and, surprise, the economy "appears" to look to be on the rebound.  Tell that to the jobless folks and the tax collectors.  They are not seeing it just yet.

As Financial Armageddon reports, those collecting the taxes are going through a bit of a dry spell, and this is one stat the government has a hard time cooking.  (I would love to link the article but I am having some technical difficulties from half way around the world.  Go to financialarmageddon and find the article from May 28 on "Not Much Doubt in these Numbers" to see what I am talking about. 

From my perspective, the government is taking a scene out of a Kevin Costner film - build it and they will come.  There is a slight variation here, however, as the infrastructure is already built for an economy that no longer exists, so their motto has been "keep it built and they will come back."  There are some exceptions to this.  Auto manufacturers are downsizing - through bankruptcy or otherwise - to more sustainable levels, and some other no longer needed retailers are going out of business, yet we insist on spending trillions in taxpayer dollars maintaing financial behemouths that have outlived their useful lives.  Go figure?

The policitians have yet to latch on to the new reality.  We need to downsize in all the sectors built on over-leveraging, be it on the individual or corporate level.  We need to get to a sustainable economy, i.e. one that is not dependent on government stimulus for survival.  There is a lot more shrinkage needed and the sooner we get on with it the better.  Nonetheless, we are hell bent on spending trillions to prevent a well needed correction.  We are, my friends, simply kicking the can down the road.  For me, the challenge has become trying to figure out how far down the road we can kick it before we have to face reality.  Right now I am thinking it could be  a couple of years or so.  We will see.   Either way, we will catch up to the can.  Be ready for it.  Meanwhile, who knows what to expect.  One thing for sure,  I disagree with the "majority" of "economists"  who apparently are saying we are on the verge of recovery and everything should be honky dory by 2010.

I must say, however, if we are going to spend the money the BRIC proposal seems much more sensible;  spending it on the real economy, not the financial sector.  I agree with their assessment that our stimulus approach to date has been misdirected and "shallow."

You can get the full story at www.economicroadmap.com/2009/05/meet-the-new-bosses.html

You may think my predictions are wrong, but keep in mind that I am 12 hours ahead of you.  So, some of your future is already my past.

Disclosures: None