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This guy is MarketWatch's doomsday columnist but he has some worthwhile ideas and warnings here.
9 scenarios and all lead to stock plunge
Paul B Ferrel, Nov 4,
SAN LUIS OBISPO, Calif. (MarketWatch) Is the U.S. Condemned by History to Slow Growth? asks Bloomberg BusinessWeek. Yes. But for traders and investors, its far worse than just bearish slow growth. Plan for no growth or zero growth.
Why? Wall Street, America and the world economy are in the early stages of a long era of de-growth, a reversal of economic growth and reduction in market growth as population growth adds new stresses on commodities resources, creates unrest, disasters and wars. Big problems ahead.
Reuters
Our nine economic scenarios all lead to a stock plunge.
Please listen: Earnings growth is in a long slowdown in all of the following nine scenarios. Economy down. Earnings down. Stocks down. Trading down. Focus on the long term, on history, look past the noise about elections and fiscal cliffs.
Why? This is an economic perfect storm. All nine scenarios end in bad news for all markets, spell danger for your future income, your familys security. Start planning now.
1. 800-year growth trend: Back to pre-Industrial Revolution levels
Yes, BusinessWeek says America is condemned by history to slow growth. They open with an IMF warning that global growth would slip below 2% in 2013. Then a review of Richard Gordons provocative National Bureau of Economic Research study: Is U.S. Economic Growth Over?
Yes. History tells us for five long centuries before the 18th century, a capita rate of just 0.2 percent per year. Then, the Industrial Revolution. A few centuries as U.S. growth shot up to 2.5% by 1930. Driven by endless innovations: Steam engine. Railroads. Electricity. More. But its been downhill since 1950, with annual growth averaging just 2.1 percent per capita through 2007.
NBERs Gordon warns: If the U.S. continues on its current trajectory, by 2100 the worlds biggest economy will wind up back where it started, at 0.2 percent growth per annum.
2. Less Than Zero Growth: Long decade of decline: 2013-2022
Markets now totally irrational: Read economist Gary Shillings Forbes warning: The Bad-News-Is-Good-News Effect Cant Last, Expect Markets to Nose-Dive. The bulls cant hear, will get caught exposed.
Listen: Theres a grand disconnect currently going on in global markets. Suddenly weakening economies worldwide are driving optimism in markets. Why? Global dependency on monetary and fiscal bailouts. Everyone wants more stimulus, more bailouts. Conditions are so bad, theyre good.
Dead ahead, a nosedive into Shillings prediction of a long decade of less than zero growth, high-stress chronic unemployment, accelerating global unrest, regional conflicts, higher Pentagon budgets, because much of the excesses and financial leverage built up in past decades, especially in the financial sector globally and among U.S consumers, remain to be worked off.
Whether bull or bear, optimist or pessimist, you better prepare of the coming Age of Austerity.
3. Hyper-Growth traders: New bubble repeats 2008 meltdown
This is a traders ultra short-term global reality: Their brains focus on The Moment like a New Age Guru meditating on the Eternal Now. Todays closing prices, quarterly earnings, even annual returns may be of interest to Main Street investors. But as BusinessWeek once put it, 15 minutes is an eternity for traders.
Forbes tells the high-frequency traders brain narrows to the 20 milliseconds it can take quotes to travel from Chicago to Nasdaqs market site in New Jersey. Traders leave stuff like long-term global population growth up to some higher power. Unfortunately, the traders myopic view of the world will ultimately backfire, repeating the 2008 meltdown.
4. Perpetual Growth: Economic theory now self-destructive fantasy
Perpetual Growth is the basic theory for all business economists in Wall Street banks, Corporate America, Big Oil, Billionaires, the Fed. Economic growth parallels population. Supply is infinite: The Chamber of Commerce CEO says the world has 1.4 trillion barrels of oil, enough to last at least 200 years, natural gas for 120 years, coal for 450 years. At least five times what we need.
These classical business economists ignore environmental economists as just liberals. But the real reason: stock profits would fall if corporations had to factor in the rising public costs of their damages to the environment.
Environmental economist Bill McKibben also knows the planet has a five-times supply of energy. But thats the big problem. If we use more than 20% of the supply, well be dumping so much excess carbon dioxide into the atmosphere well soon kill the planet. Big Oil doesnt care, warns McKibben: Big Oil is a rogue industry, reckless like no other force on Earth ... Public Enemy No. 1 to the survival of our planetary civilization. Big-Oil dismisses environmentalists as a left-wing anti-capitalist conspiracy plot.
5. Population Growth out of control: Planet cant feed 10 billion
6. Gates, Cap population growth at 8.3 billion: But still too many
7. End World Poverty to end growth on our Crowded Planet
8. De-Growth scenario: WorldWatchs solution to global disasters
9. War and Disaster scenarios: Bad endings are inevitable
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Warning to all you investors, the stage is set. The economic growth trajectory of the last 300 years is ending. You must take action, protect your family. A collapse can happen sooner than you think, spread fast, wide ... these nine scenarios are now a perfect storm.
http://www.marketwatch.com/Story/story/print?guid=12867676-2206-11E2-B4EC-002128040CF6
kurt_cagle
(534 posts)is something of a permabear. They love him at Zero Hedge, because he tends to hawk a lot of advice specifically for the gloom and doom crowd. In the main, yes, the economy is in for a rough decade - we're now in a high oil cost regime, employment's going to remain stubbornly high for a while even with fairly strong government intervention, and demographics are working against the US economy in particular. However, I suspect that the Keynesian stimulus that all of the Misesians decry is finally beginning to kick the economy back into life. In general the people who are adamant followers of the Mises School hate Keynesian economics with a passion, largely because historically it tends to work - the government should become the market when the private market is not able to do so, and then as the private market recovers, should shift towards more of a policing role.
ErikJ
(6,335 posts)The ironic thing is that the GOP are the biggest Keynesians out there. Reagan and Bush both at least tripled spending on the military induatrial complex. But they cut taxes on the rich at the same time which drove us into deep debt. Reagan TRIPLED the natl debt and Bush doubled it. And the problem with MilitaryKeynesianism is it doesnt directly help our country's infrastructure at all. Its wasted wealth. The bombs and weapons go boom or rust.
JackRiddler
(24,979 posts)defacto7
(13,485 posts)uneducated in the workings of the business world.... don't laugh... I'm serious...
And what's wrong with slow steady growth? Why would we need or expect a hyper-growth economy, one that always seems to be expected to last for eternity?
kurt_cagle
(534 posts)On the left especially, I think you're seeing more and more calls for moving to a sustainable rather than growth oriented economy. The only problem is that sustainable economies are anathema to the big banks and corporations - growth translates into profits. It's one reason why the banksters will willingly choose inflation over deflation.