WOW! It seems you pessimists are quite serious with your predictions, yet I wouldnt discount the American drive to get through situations and invent new ways around problems...we always have in the past!
Overall they say all real estate is local, this is only partly true, but the companies in Washington are doing extremely well. Farming communities are shipping a record amount of crops, MSFT, Boeing, SBUX, Costco, Bio-tech companies, Amazon, and all the other large companies have a direct impact on the local economy. These companies are thriving; adding jobs, increasing stock prices (add significant wealth to families), increasing sales and the like.
People as a whole in the Seattle area are getting wealthier and being shown through the increased demand for housing. Over the past several years we have had significant increases in people moving to Seattle (1.5% increase in the last year).
Like I said earlier, the only way these apocalyptic predictions could even have a chance at occurring is if Boeing, Microsoft, and Starbucks went out of business or move 100% of jobs out of the state...NOT GOING TO HAPPEN!
BTW: It appears the predicted 2Q07 GDP is going to be ~2.5% to 3.0%, up from 0.7% 1Q07...so even the economy is starting to rebound. Also, why hasn't the economy already crashed if the several overheated RE markets have been deflating? It hasn't brought down the economy yet...
P.S. My suspicion is that most of the pessimists on this blog are democrats and they hate Bush so much that they only wish the economy would plunge into the next depression under his presidency...am I wrong?
On top of all that, you can check my site to learn about peak oil, and once you do that, then you can imagine that peak mining isn't far behind, and thus peak copper, aluminum, zinc, etc. It's not that supply of oil or other raw materials will go down that fast, it's just that demand for them will keep growing as supply stays flat or contracts.
You make an interesting point about 'peak mining'. DISCLAIMER : Peak normally refers to production not usage. That said, we could continue extracting oil with 2% increases every year forever, and we would still not have enough of it pretty soon. A similar statement might be made about minerals. One caveat, however, is that minerals can be recycled.
The good news however is that most key technologies will revolve around common elements. For example, as biotech becomes more valuable, you can imagine a world where we actually extract carbon, nitrogen, oxygen, and hydrogen out of the air or ocean to construct useful lifeforms. Likewise, we may learn how to make silicon based life, which is plentiful in the earth's crust.
Three billion Indians and Chinese are desperate to prove you wrong. They don't care much about our housing markets and even if their economy gets screwed because we can't buy as much from them, they'll find ways to keep their foothold into 20th century living and keep consuming more than they did just a few years ago. They've been using their surplus reserves to lock up long term contracts with energy producers around the globe, so they might just be able to launch their own consumer economy once ours falters.
On top of all that, you can check my site to learn about peak oil, and once you do that, then you can imagine that peak mining isn't far behind, and thus peak copper, aluminum, zinc, etc.
I don't disagree with the LONG term prospects for China, India, and other developing nations. However, nothing goes up in a straight line. I think the amazingly successful rise of the USA is a great case study of this. Sure, the USA has had phenomenal growth in the last 200 years, but it has went through some absolutely gut-wrenching economic dislocations and wars along the way. There were major depressions in 1870s and 1930s, just to name a couple. And does anyone forget the civil war? Or going back a little further there was the revolutionary war, and then the Indian war with King Phillip in New England (which killed proportionately more of the European settler population than any conflict since).
The economic mal-investments across the world are SO out of wack right now that there is going to be a lot of pain for eveyone, Chinese and Indians included. The stories about speculative construction and non-performing loans I keep hearing from China make one's blood curdle. Remember that just when everyone thought Japan was about to conquer the universe in the 1980s they went into a major economic retrenchment. Developing economies like China and India are even MORE suseptible to violent down-swings (as well as the booms). It's kind of like the old gold-rush economic cycles in America, where there would be a phenomenal growth spurt, followed by a decade (or multi-decade) rationalization.
As far as "peak oil" goes, it is something that just doesn't concern me. We went through "peak whale oil" once too, but life didn't come to an end. I fully believe that market forces will lead our economies to make whatever adjustments are necessary to the changes in crude oil production. The only thing we need to do is make sure we allow the market forces to work (i.e. let oil prices rise as the market demands). Ditto for all the comodities.
People have been predicting resource catastrophe for thousands of years, but civilization goes on any (despite Jared Diamond's warnings to the contrary).
My suspicion is that most of the pessimists on this blog are democrats and they hate Bush so much that they only wish the economy would plunge into the next depression under his presidency...am I wrong?
Not here. Conservative, former Republican. Voted for GWB in '00 (considered myself a 'broken glass Republican'). I now want to puke everytime I see that man. Wrote in P. Buchannan in '04. I think Inslee, Cantwell, and Murray are a bunch of leftist pinkos and want to see them defeated.
The economy sucks not because of Bush or The Unibanger. The economy sucks because my fellow Americans are a bunch of debt-laden, corpulant, layabouts that think they can spend, and gamble their way to prosperity. Everyone thinks they are above average, but our society is getting dumber by the hour.
The only way I am voting GOP in '08 is if some Stalinist senator from NY heads up the ticket on the Dem side. Personally, I hope Barry Hussein Obama gets the nod. I'll pop about a cubic metre of popcorn and enjoy the show.
WOW! It seems you pessimists are quite serious with your predictions, yet I wouldnt discount the American drive to get through situations and invent new ways around problems...we always have in the past!
Panglossian platitudes are no substitution for cold, hard reality. Eventually Americans are going to have to live within their means. It is a fundamental law of the universe.
People as a whole in the Seattle area are getting wealthier and being shown through the increased demand for housing. Over the past several years we have had significant increases in people moving to Seattle (1.5% increase in the last year).
You have it backwards. People are getting wealthier through housing. If our wealth drove housing, we would not be taking out as many toxic loans to keep things afloat. Housing traditionally trades between 2-4x incomes. Not the insane 8-15x that we are experiencing.
It seems you pessimists are quite serious with your predictions, yet I wouldnt discount the American drive to get through situations and invent new ways around problems...
I am actually quite optimistic for the long run. I just think we need to go through a perfectly normal process of economic rebalancing. The downturn I think is coming will just help us work off the mal-investments, and then set us up for another lengthy multi-generational period of sustained growth. It's just that we have to go through a depression every few generations to sear the wisdom of economic prudence into our collective consciousness once again. The further we get from past periods of economic hardship, the less people really believe that such terrible calamities can occur, and embark on increasingly irrational behaviour due to moral hazard (i.e. we don't think anything truy bad can happen).
I defy someone to listen to the water-cooler chatter at my work, with people talking about the money they are making from their homes, and how much "tech" is changing the universe and say that this is normal. The naivete, and out-of-ballance priorities are SO over-the-top these days that we need a serious thump on the head to get things back on track.
Like I said earlier, the only way these apocalyptic predictions could even have a chance at occurring is if Boeing, Microsoft, and Starbucks went out of business or move 100% of jobs out of the state...NOT GOING TO HAPPEN!
Ummm... I don't think it would take anything nearly as dramatic as 100% loss of jobs for our local economy (and real-estate) to be hit in a major way. In fact, if these major employers merely announced hiring freezes, our local economy would freeze up like a glacier. I remember how scared people were starting to feel back in 2002, and that was NOTHING. A little global recession with cancellations of aircraft orders, cutbacks in discretionary spending for coffee, and slower IT spending will have a HUGE impact on our region.
My suspicion is that most of the pessimists on this blog are democrats and they hate Bush so much that they only wish the economy would plunge into the next depression under his presidency...am I wrong?
I have never voted for a Democrat in my life. Well, I haven't voted for a Republican either, seeing as how I usually look for the "Libertarian" box.
BTW: It appears the predicted 2Q07 GDP is going to be ~2.5% to 3.0%, up from 0.7% 1Q07...so even the economy is starting to rebound. Also, why hasn't the economy already crashed if the several overheated RE markets have been deflating? It hasn't brought down the economy yet...
You can't be serious.
Are you hanging on government numbers to justify the economic outlook for the country? Your credibility is already pretty shaky, but this moves you to the back of the class. We are talking RCG quality stuff here, Finance.
First off, you need to tell me how the M3 can expand at 14%/yr, but the economy can only grow less than 3%. (inflation). With all that, it is no wonder the economy is "growing."
Tell me, what is the unemployment rate? You will likely quote U-3. I want to know what the U-6 number is.
we have to go through a depression every few generations to sear the wisdom of economic prudence into our collective consciousness once again. The further we get from past periods of economic hardship, the less people really believe that such terrible calamities can occur, and embark on increasingly irrational behaviour due to moral hazard (i.e. we don't think anything truy bad can happen).
Every child should have to commit this to memory from the 4th grade all the way to HS graduation.
I love talking to old folks about the economy. They tell a different tale than Silent Generationals, Boomers, GenXers, and Millenials. Today has everything to do with ignorance of economic history. Debt is a horrible thing. Nobody born after the early '20s understands this from an experiencial point of view.
We will learn this again. The Romans had to learn this. The English did. The Venicians did. You can't defeat economic reality. Economics is just human nature set to math. Debt and stupidity doesn't equal wealth anymore than 2+2=88.
One thing to keep in mind is China is a brainwave away from massive civil unrest. Tens of millions of rural Chinese are moving to the cities for jobs. Tens of millions, if not more, are speculating in their stock market in such a fashion that makes our drunken craziness look like cash-n-carry.
1.3B people, and a hundred million extra males without any hope of a wife, without a job and no agricultural skills is going to be dicey.
India isn't much better. A huge economic contraction could put them back in the stone age. Bangalore could be a ghost town.
Tariffs (good or bad) are going to be a political reality in the West in a very short time. These tariffs will be aimed at the East.
It has been 70 years since we had a world-wide recession. Look what happened last time when only a small portion was industrialized and competing for abundant resources.
BTW: It appears the predicted 2Q07 GDP is going to be ~2.5% to 3.0%, up from 0.7% 1Q07...so even the economy is starting to rebound. Also, why hasn't the economy already crashed if the several overheated RE markets have been deflating? It hasn't brought down the economy yet...
You can't be serious.
Are you hanging on government numbers to justify the economic outlook for the country? Your credibility is already pretty shaky, but this moves you to the back of the class. We are talking RCG quality stuff here, Finance.
First off, you need to tell me how the M3 can expand at 14%/yr, but the economy can only grow less than 3%. (inflation). With all that, it is no wonder the economy is "growing."
Tell me, what is the unemployment rate? You will likely quote U-3. I want to know what the U-6 number is.
If you're interested in government numbers, the site Shadow Government Statistics is worth checking out. If they're to be believed, the government has seriously manipulated the way that GDP and CPI have been calculated in recent years. Also they have an M3 continuation.
Great stuff. Anybody here have a subscription to the raw data?
WOW! It seems you pessimists are quite serious with your predictions, yet I wouldnt discount the American drive to get through situations and invent new ways around problems...we always have in the past!
My studies lead me to conclude that most new ways around problems are really ways to use more energy at faster rates. This technique will be a spectacularly bad way to try to meet a permanent energy crisis, but that seems to be a popular approach with many people anyway.
Frankly, I'm not all that pessimistic about housing bubbles and eternal inflation, if only energy supplies wouldn't peak. But, alas, it's going to, and soon. A fusion breakthrough seems to be our last hope for continuing the ever growing economy where inflation can be hidden easily. Even then, population would create all the same problems again because we're as dumb as yeast.
P.S. My suspicion is that most of the pessimists on this blog are democrats and they hate Bush so much
Saying you hate Bush is like saying you like money. Even conservatives hate Bush because he is the ultimate radical. Me, I'm in the "different puppet, same hand" camp. These guys don't control policy, they just execute it in accordance with the decisions of the plutocracy. Capitalism isn't government by or for or of the people, but those things put a nice face on it so that it is more palatable to people who don't know any better.
we could continue extracting oil with 2% increases every year forever, and we would still not have enough of it pretty soon. A similar statement might be made about minerals. One caveat, however, is that minerals can be recycled.
Exactly true. My stepfather is in the scrap recycling business and it has been booming for a long time now with no end in sight.
I have heard many good arguments about how hard it becomes to recycle metals, though, for example the timy amounts of silver or gold in each computer that is thrown out.
Exactly true. My stepfather is in the scrap recycling business and it has been booming for a long time now with no end in sight.
I have heard many good arguments about how hard it becomes to recycle metals, though, for example the timy amounts of silver or gold in each computer that is thrown out.
finance said, "Overall they say all real estate is local, this is only partly true, but the companies in Washington are doing extremely well. Farming communities are shipping a record amount of crops, MSFT, Boeing, SBUX, Costco, Bio-tech companies, Amazon, and all the other large companies have a direct impact on the local economy. These companies are thriving; adding jobs, increasing stock prices (add significant wealth to families), increasing sales and the like."
Not true for biotech, I work for the company that begins with an "A" and ends with an "n" (we are the biggest in the industry besides Genentech). We currently have a hiring freeze until '09. They stopped construction of a new research bldg. here in Seattle that would have added 1k new employees.
In addition, ICOS can't find a buyer for its' production facility in Bothell and Zymogenetics has laid off poeple within the last couple of years. The other biotechs are 3rd and 4th tier companies that wouldn't make much of an economic impact.
Seattle is not a hub for biotech, it's SF and Beantown (I've worked for a biotech in Beantown).
Comments
Overall they say all real estate is local, this is only partly true, but the companies in Washington are doing extremely well. Farming communities are shipping a record amount of crops, MSFT, Boeing, SBUX, Costco, Bio-tech companies, Amazon, and all the other large companies have a direct impact on the local economy. These companies are thriving; adding jobs, increasing stock prices (add significant wealth to families), increasing sales and the like.
People as a whole in the Seattle area are getting wealthier and being shown through the increased demand for housing. Over the past several years we have had significant increases in people moving to Seattle (1.5% increase in the last year).
Like I said earlier, the only way these apocalyptic predictions could even have a chance at occurring is if Boeing, Microsoft, and Starbucks went out of business or move 100% of jobs out of the state...NOT GOING TO HAPPEN!
BTW: It appears the predicted 2Q07 GDP is going to be ~2.5% to 3.0%, up from 0.7% 1Q07...so even the economy is starting to rebound. Also, why hasn't the economy already crashed if the several overheated RE markets have been deflating? It hasn't brought down the economy yet...
P.S. My suspicion is that most of the pessimists on this blog are democrats and they hate Bush so much that they only wish the economy would plunge into the next depression under his presidency...am I wrong?
You make an interesting point about 'peak mining'. DISCLAIMER : Peak normally refers to production not usage. That said, we could continue extracting oil with 2% increases every year forever, and we would still not have enough of it pretty soon. A similar statement might be made about minerals. One caveat, however, is that minerals can be recycled.
The good news however is that most key technologies will revolve around common elements. For example, as biotech becomes more valuable, you can imagine a world where we actually extract carbon, nitrogen, oxygen, and hydrogen out of the air or ocean to construct useful lifeforms. Likewise, we may learn how to make silicon based life, which is plentiful in the earth's crust.
I don't disagree with the LONG term prospects for China, India, and other developing nations. However, nothing goes up in a straight line. I think the amazingly successful rise of the USA is a great case study of this. Sure, the USA has had phenomenal growth in the last 200 years, but it has went through some absolutely gut-wrenching economic dislocations and wars along the way. There were major depressions in 1870s and 1930s, just to name a couple. And does anyone forget the civil war? Or going back a little further there was the revolutionary war, and then the Indian war with King Phillip in New England (which killed proportionately more of the European settler population than any conflict since).
The economic mal-investments across the world are SO out of wack right now that there is going to be a lot of pain for eveyone, Chinese and Indians included. The stories about speculative construction and non-performing loans I keep hearing from China make one's blood curdle. Remember that just when everyone thought Japan was about to conquer the universe in the 1980s they went into a major economic retrenchment. Developing economies like China and India are even MORE suseptible to violent down-swings (as well as the booms). It's kind of like the old gold-rush economic cycles in America, where there would be a phenomenal growth spurt, followed by a decade (or multi-decade) rationalization.
As far as "peak oil" goes, it is something that just doesn't concern me. We went through "peak whale oil" once too, but life didn't come to an end. I fully believe that market forces will lead our economies to make whatever adjustments are necessary to the changes in crude oil production. The only thing we need to do is make sure we allow the market forces to work (i.e. let oil prices rise as the market demands). Ditto for all the comodities.
People have been predicting resource catastrophe for thousands of years, but civilization goes on any (despite Jared Diamond's warnings to the contrary).
Not here. Conservative, former Republican. Voted for GWB in '00 (considered myself a 'broken glass Republican'). I now want to puke everytime I see that man. Wrote in P. Buchannan in '04. I think Inslee, Cantwell, and Murray are a bunch of leftist pinkos and want to see them defeated.
The economy sucks not because of Bush or The Unibanger. The economy sucks because my fellow Americans are a bunch of debt-laden, corpulant, layabouts that think they can spend, and gamble their way to prosperity. Everyone thinks they are above average, but our society is getting dumber by the hour.
The only way I am voting GOP in '08 is if some Stalinist senator from NY heads up the ticket on the Dem side. Personally, I hope Barry Hussein Obama gets the nod. I'll pop about a cubic metre of popcorn and enjoy the show.
Panglossian platitudes are no substitution for cold, hard reality. Eventually Americans are going to have to live within their means. It is a fundamental law of the universe.
You have it backwards. People are getting wealthier through housing. If our wealth drove housing, we would not be taking out as many toxic loans to keep things afloat. Housing traditionally trades between 2-4x incomes. Not the insane 8-15x that we are experiencing.
Housing IS the economy.
I am actually quite optimistic for the long run. I just think we need to go through a perfectly normal process of economic rebalancing. The downturn I think is coming will just help us work off the mal-investments, and then set us up for another lengthy multi-generational period of sustained growth. It's just that we have to go through a depression every few generations to sear the wisdom of economic prudence into our collective consciousness once again. The further we get from past periods of economic hardship, the less people really believe that such terrible calamities can occur, and embark on increasingly irrational behaviour due to moral hazard (i.e. we don't think anything truy bad can happen).
I defy someone to listen to the water-cooler chatter at my work, with people talking about the money they are making from their homes, and how much "tech" is changing the universe and say that this is normal. The naivete, and out-of-ballance priorities are SO over-the-top these days that we need a serious thump on the head to get things back on track.
Ummm... I don't think it would take anything nearly as dramatic as 100% loss of jobs for our local economy (and real-estate) to be hit in a major way. In fact, if these major employers merely announced hiring freezes, our local economy would freeze up like a glacier. I remember how scared people were starting to feel back in 2002, and that was NOTHING. A little global recession with cancellations of aircraft orders, cutbacks in discretionary spending for coffee, and slower IT spending will have a HUGE impact on our region.
I have never voted for a Democrat in my life. Well, I haven't voted for a Republican either, seeing as how I usually look for the "Libertarian" box.
You can't be serious.
Are you hanging on government numbers to justify the economic outlook for the country? Your credibility is already pretty shaky, but this moves you to the back of the class. We are talking RCG quality stuff here, Finance.
First off, you need to tell me how the M3 can expand at 14%/yr, but the economy can only grow less than 3%. (inflation). With all that, it is no wonder the economy is "growing."
Tell me, what is the unemployment rate? You will likely quote U-3. I want to know what the U-6 number is.
Every child should have to commit this to memory from the 4th grade all the way to HS graduation.
I love talking to old folks about the economy. They tell a different tale than Silent Generationals, Boomers, GenXers, and Millenials. Today has everything to do with ignorance of economic history. Debt is a horrible thing. Nobody born after the early '20s understands this from an experiencial point of view.
We will learn this again. The Romans had to learn this. The English did. The Venicians did. You can't defeat economic reality. Economics is just human nature set to math. Debt and stupidity doesn't equal wealth anymore than 2+2=88.
1.3B people, and a hundred million extra males without any hope of a wife, without a job and no agricultural skills is going to be dicey.
India isn't much better. A huge economic contraction could put them back in the stone age. Bangalore could be a ghost town.
Tariffs (good or bad) are going to be a political reality in the West in a very short time. These tariffs will be aimed at the East.
It has been 70 years since we had a world-wide recession. Look what happened last time when only a small portion was industrialized and competing for abundant resources.
My advice? Panic now and beat the rush.
Great stuff. Anybody here have a subscription to the raw data?
Gov't numbers being trash is exactly my point. That Shadow Stat site is pretty good, but I don't have a subscription to it.
The modern era is just a huge example of people believing what they are told versus what they are experiencing.
We have almost defined away any recession, unemployment, or inflation.
My studies lead me to conclude that most new ways around problems are really ways to use more energy at faster rates. This technique will be a spectacularly bad way to try to meet a permanent energy crisis, but that seems to be a popular approach with many people anyway.
Frankly, I'm not all that pessimistic about housing bubbles and eternal inflation, if only energy supplies wouldn't peak. But, alas, it's going to, and soon. A fusion breakthrough seems to be our last hope for continuing the ever growing economy where inflation can be hidden easily. Even then, population would create all the same problems again because we're as dumb as yeast.
Saying you hate Bush is like saying you like money. Even conservatives hate Bush because he is the ultimate radical. Me, I'm in the "different puppet, same hand" camp. These guys don't control policy, they just execute it in accordance with the decisions of the plutocracy. Capitalism isn't government by or for or of the people, but those things put a nice face on it so that it is more palatable to people who don't know any better.
Exactly true. My stepfather is in the scrap recycling business and it has been booming for a long time now with no end in sight.
I have heard many good arguments about how hard it becomes to recycle metals, though, for example the timy amounts of silver or gold in each computer that is thrown out.
You might appreciate these:
To meet this demand, China's steel production is to nearly double during the rest of this decade. But China's iron ore production is forecast to remain basically flat.
Electronic waste can contain 1,000 different substances including lead, cadmium, chromium and mercury - heavy metals which are highly toxic
Not true for biotech, I work for the company that begins with an "A" and ends with an "n" (we are the biggest in the industry besides Genentech). We currently have a hiring freeze until '09. They stopped construction of a new research bldg. here in Seattle that would have added 1k new employees.
In addition, ICOS can't find a buyer for its' production facility in Bothell and Zymogenetics has laid off poeple within the last couple of years. The other biotechs are 3rd and 4th tier companies that wouldn't make much of an economic impact.
Seattle is not a hub for biotech, it's SF and Beantown (I've worked for a biotech in Beantown).