More Great Economic News

Discussion in 'Business & Economics' started by sandy, Jun 2, 2007.

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  1. madanthonywayne Morning in America Registered Senior Member

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    Isn't this a natural and needed correction? Why should we be surprised that "subprime" loans have a higher default rate? Weren't they always expected to have a higher default rate? Isn't that what makes them subprime?

    It's the same damned bullshit that caused the great depression, the tulip crisis, and the internet bubble. People take out loans they can't pay on the expectation that what they buy with the money will rise in price so much that will allow them to pay back the loan and turn a profit.

    All well and good until, all of the sudden, the price stops going up.
    Within the context of a discussion of the history US/Indian relations, sure it does.
    Why is that ultimately and not now? Or some point even further in the future.
    You have a very Malthusian zero sum game outlook. Remember the eighties? Everyone thought Japan was going to end up owning the world. Then they hit some hard times.

    What is China's comparitive advantage over the US? Low wages, lack of debt. In the US (and the West in general) we have a more free and open society. We have a much less corrupt government and corporate structure (the British sence of fair play you've alluded to in the past). We have a growing population (as opposed to China's shrinking population).

    China has many of its own problems to deal with. It's special mix of relative economic freedom with dictatorship in a theoretically communist country could blow up on them at any time. Suppose they get a new leader who wants to return to an ideologically purer form of communism. Suppose he executes the evil businessmen and puts his cronies in charge? Or, on the other hand, suppose the people of China get tired of their lack of political freedom and revolt? Throwing the country into chaos.

    Anything can happen. You seem to assume that everything will go just right for China and completely wrong for us. It's possible, but I'd say very unlikely. The more likely outcome lies somewhere between your Mad Max Beyond Thunderdome future and Sandy's disneyland adventure.
     
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  3. Buffalo Roam Registered Senior Member

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    And the biggest problem coming up for China is the imbalance in Male/Female ratios, their one child policy is leading to a large shortage of females being born, female fetus are being aborted at a fantastic rate in favor of getting a male child.

    SHANGHAI, China -- The lopsided male-female ratio in China caused by sex-selection abortions is worsening, pushed up to 120 men for every 100 women.

    China grapples with legacy of its ‘missing girls’
    Disturbing demographic imbalance spurs drive to change age-old practices

    Claro Cortes Iv / REUTERS
    A Chinese father carries his child at a park in Shanghai on September 8th. After 11 years of negative population growth, China's eastern financial hub of Shanghai has cancelled rewards for married couples who decide not to have children.


    NBC News
    updated 7:56 a.m. CT, Tues., Sept. 14, 2004
    BEIJING - China is asking where all the girls have gone.

     
    Last edited: Jan 10, 2008
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  5. spidergoat Venued Serial Memberlist Valued Senior Member

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    This car will not be sold in the US or Europe. I wouldn't want one anyway, the Smart is a much better design. They get good mileage by keeping it tiny and using a small engine. Anyone can do that, it's no great breakthrough. I can show you gasoline powered bicycles that get 250mpg.

    There is someone converting Hummers into gas-turbine and turbo-diesel hybrids that get 100mpg, but the price is prohibitive.
     
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  7. Billy T Use Sugar Cane Alcohol car Fuel Valued Senior Member

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    Not really, except for things that are in limited supply in the Earth do not I agree with Malthus. He was assuming that sex was so popular that population growth would always over ride production growth - clearly wrong now that birth control is available and most advanced nations have exactly the opposite problem - too few births for replacement so imigration from less prosperous areas is essential. The Japan comment is only another example, like England earlier and USA now of the shifting importance of various nations. I.e. The lesson of history is that one should expect USA dominance to fade.

    From an economic POV, based on what Japan did after WWII to rapidly recover and the past three decades of China and a few others, including the Marshall Plan in Europe, I think government selection and aid to some basic longer term payoff infrastructure instead of the free hand of the market place is the better system.
    Also, note that corruption is not necessaryly bad for economic advance. The "Brazilain miracle decade" was under the corrupt military dictatorship. Rome only ruled the world by corruption (local tax collector growing rich, bribes for all business, etc.) Even US growth was greatest in the corrupt era of the "robber barons." - Don't confuse morality with economic progress.

    Yes a bad leader can destroy a nation. IMHO, GWB is exhibit #1. China already has elected the leader for five years hence! China operates under a rational 50 year plan. -Perhaps that is it greatest advantage, but the managed flow of funds into long term infrasturcture is also very important. 30 year contracts it is signing for the raw materials and energy with anyone who can supply them even very corrupt regiems in Africa, etc. The WSJ page B1 of 28Dec07 had article I saved called "China: New Dam Builder for the World" First sentence is:

    "Home to almost half of the worl's 45,000 biggest dams, China has embarked on a push to export its hydropower knowledge to developing countries." then: "Chinese companies and banks are now involved in billions of dollars worth of deals to construct at least 47 major dams in 27 countries."

    Thus not only in China, but allover the developing world China, not the US an EU is the force for development, making the long term infrastructure investment that make the greatest returns - US can not think beyond the next election and tend's to have "Sandy attitiude" that they are poor as they are lazy, so China is in process of eating the US's cake. - locking up the resources it will need.

    Thus I am not assuming good luck for China and bad luck for US - only looking at what is happening and what that implies for the future.
     
    Last edited by a moderator: Jan 10, 2008
  8. madanthonywayne Morning in America Registered Senior Member

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    Can't argue with that. Nothing lasts forever.
    I don't concede that government control is better. It never has enough knowledge to accurately predict how best to allocate resources.

    It may be, though, that a little "corruption is not so bad. It can speed things up and, therefore, save money that way. I think the current US system with competitive bidding and all kinds of paperwork is inefficient and we'd probably be just as well served if they let government officials hire their brother in law, so long as they charged reasonable fees.

    But if corruption is so widespread that it bogs down the system and leads to an inefficient allocation of resourses, that's obviously not good. And I've heard that's the case in China.
    Sure, in the US we have environmental boneheads complaining about any such energy project to the point we can't get shit done. Any reasonable person can see that the clean power generated by hydroelectric dams is much more important than the migration patterns of some damned fish. But we are so bogged down by environmental regulations, we can't build dams anymore. It's idiotic.
    Sure, but any such predictions rely on linear projections and assume everyone will keep doing what they're doing now.

    If the economy goes to shit, we may just come to our senses and do the right things. Since you're touting the benefits of dictatorship, we may well get one of those in the US if things really go into the shitter. If he's a good one, we too can ditch those meddlesome environmental, safety, and union type rules that are presently holding us back and giving the Chinese an edge.

    We could build dams without worrying about the fish or even the villagers affected. We could build coal fired power plants without concern for sulfur or (even more ridiculous) CO2 emissions. We could build factories without worrying about how the snail darter is affected. We could drill for oil anywhere we could find it.

    All of those changes don't require a dictator, of course, just a government more concerned with the economy than other BS. And a depression would tend to produce that kind of government, wouldn't you think?

    My point is that while you may well be right that there's trouble brewing; you really can't predict what the outcome will be. So while we should prepare ourselves for a potentially rough ride, we don't need to abandon ship and assume all is lost.
     
  9. Billy T Use Sugar Cane Alcohol car Fuel Valued Senior Member

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    Yes and with complete government control there is no system to rapidly step in and fill the gap. I'll tell two true stories to illustrate:

    The solar neutrino puzzle, now solved, used huge tank of carbon tetra Chloride (C Cl4) in a deep old lead mine as Chlorine can become Argon via a rare interaction with the neutrino. One day a coat hanger sales man showed up at the isolated office. He knew anyone who orders tank cars of carbon Tet must be needing lots of coat hangers as dry cleaning was the main use of C Cl4 back then. Adam Smith's invisible hand is not always correct but always working.

    I was riding on train in Hungary, speaking with Russian economics student who summer jobs were in a tomatoes canning factory. (There was a lot of silliness about her plant slightly cooking then canning to ship to Bulgaria and then getting somewhat more cooked the same tomatoes back for final conversion in to catsup so both factories earned "export credits" but that corruption is not my current point). Her last summer, she sat at her work station three months reading English books as the central planners had forgotten that cans need lids. The tomatoes came from the state farms every day by the truck loads but the factory manager bribed the drivers to deliver them straight to the town dump and signed for them.

    I certainly am not for government control. Never said that. I said that in making funds available for long term payoff infrastructure the free market generally fails, so the hybrid system China is developing may be the best.
     
    Last edited by a moderator: Jan 11, 2008
  10. Donnal Registered Member

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    you gotta admit thats funny
     
  11. USS Exeter unamerican american Registered Senior Member

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    Hummers should be illegal to drive.
     
  12. sandy Banned Banned

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    Tell that to the cops I pull out of ditches in snow storms. Tell that to people I get to the hospital when the ambulances can't run. Tell that to people I run errands for in bad weather. Tell that to anyone but me.

    Hummers are AWESOME--especially the ones with machine guns on top!! :xctd:

    http://diecast-store.co.uk/images/CS90205.jpg

    :xctd:
     
  13. Carcano Valued Senior Member

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    Gun down the homeless...for Jesus!!!
     
  14. sandy Banned Banned

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    Nah. I'm saving it for a terrorist.

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  15. kmguru Staff Member

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  16. Carcano Valued Senior Member

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    The US has less than 300 billion in gold reserves...certainly not enough to pull them out of the bottomless pit GWB has blundered into.

    The IMF apparently wants to dump its gold reserves, in spite of protests from Canada (the largest gold producer) that it would drive down the price.
     
  17. Billy T Use Sugar Cane Alcohol car Fuel Valued Senior Member

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    Yes there is still some female infanticide and sex selective abortions, but it is not a significant problem for China. The reason why most Chinese cities have significantly more males than females has nothing to do with differential live birth rates.

    Many Chinese men, especially construction workers in rapidly building China, only return to their native villages and wives one week each year. China has recognized this problem and is building dozens of new commercial centers distributed in the heart lands, trying to keep the populations in the villages from being so excessively females. Many Chinese villages resemble the New England coastal villages in the days when men hunted whales in year long trips.

    The "job separation" of the sexes is the problem, not the slight difference in live births by sex. CNN had a several part series on one of these new commercial centers.
     
    Last edited by a moderator: Jan 11, 2008
  18. sandy Banned Banned

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    OH.MY.GOSH.

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    :xctd:
     
  19. Billy T Use Sugar Cane Alcohol car Fuel Valued Senior Member

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    Yes the IMF has little choice but to dump gold as many countries have paid their debts to it off (Brazil did a couple of years ago). Most of those that have not paid off are "basket cases." They do not even pay the interest due or were recently "forgiven" most or all of their debts in recognition that they could not pay. Thus, the IMF has very little income and still lots of expenses. They will sell gold whether Canada, South African and Sandy want to see price of gold drop rapidly or not. The IMF does not have any other choice, except to fold up, and when was the last time well paid independant experts did that?
     
  20. sandy Banned Banned

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  21. Buffalo Roam Registered Senior Member

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    :roflmao::roflmao::roflmao:
     
  22. sandy Banned Banned

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    More kool-aid? Tin foil hat too tight?

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  23. flameofanor5 Not a cosmic killjoy Registered Senior Member

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    A ella le gusta la gasolina!!!!
     
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