What is wrong with the US economy? Part 2

[mheslep]

it was gambling. they knew it was gambling. the guys running the casino even got congress to pass a law making it exempt from gaming laws. i take this as proof of intent.

http://static.uspirg.org/consumer/archives/2008/10/60_minutes_on_c.html
http://static.uspirg.org/consumer/archives/2008/10/swaps_and_deriv.html

now, we need to figure out a way to put Phil Gramm in prison...

For what? First goes Franklin Raines, then anybody else like Corn trying hide the GSE's culpability in this.

Here's President Clinton on Gramm's bill:

MARIA BARTIROMO

Mr. President, in 1999 you signed a bill essentially rolling back Glass-Steagall and deregulating banking. In light of what has gone on, do you regret that decision?
FORMER PRESIDENT BILL CLINTON

No, because it wasn't a complete deregulation at all. We still have heavy regulations and insurance on bank deposits, requirements on banks for capital and for disclosure. I thought at the time that it might lead to more stable investments and a reduced pressure on Wall Street to produce quarterly profits that were always bigger than the previous quarter. But I have really thought about this a lot. I don't see that signing that bill had anything to do with the current crisis. Indeed, one of the things that has helped stabilize the current situation as much as it has is the purchase of Merrill Lynch (MER) by Bank of America (BAC), which was much smoother than it would have been if I hadn't signed that bill.

http://www.businessweek.com/magazine/content/08_40/b4102000409948.htm

 

[Astronuc]

Fred and Fannie further contributed by blurring of the lines between prime and subprime by instituting 'no-doc' and liar loans. I've yet to see any evidence that they really know just how 'prime' their so called prime portfolio really is, given the absence of documenation.

I would also like to see the documentation on loan-default and foreclosure rates by institution, i.e. GSE's and private companies. I'd also like to know who originated sub-prime, Alt-A, and fraudulent mortgages, and how they were transformed into mortgage back securities (MBSs) including who originated them, and then who bought MBS's and other dubious financial instruments.

I'm particularly curious about the amount of defaults mentioned in Dodd's article
http://www.imf.org/external/pubs/ft/fandd/2007/12/dodd.htm

How could a modest increase in seriously delinquent subprime mortgages, which amounted to an additional $34 billion in troubled loans, so disrupt the $57 trillion U.S. financial system last summer that worldwide financial turmoil ensued? Lax, if not fraudulent, underwriting practices in subprime mortgage lending largely explain the rise in the rate of seriously delinquent loans from 6 percent to 9 percent between the second quarter of 2006 and the second quarter of 2007. But the impact on financial markets and economies far exceeds any expected losses from mortgage foreclosures.

The increase in defaults was $34 billion, and at one third of defaults, it would be ~$100 billion in default, yet the entire financial system is controlling something like $57 trillion. This is where I think the complicated financial instruments CDS's, CDO's, MBS's, SIV's played a role, and those came out of private investment companies, not the GSEs. The GSEs may have purchased those investments for their portfolios, based on high rates of return and good ratings from Fitch, Moody's and Standard & Poor, but they didn't necessarily orginate CDO's or MBS's.

It wasn't just the democrats, or just the republicans, but rather I see both democrats and republicans being culpable - they all got their hand dirty. Everyone wanted growth in the economy, and they threw caution to the wind and failed regulate. Clinton and congress repealed the Glass-Steagal act, but failed to provide appropriate regulation subsequently. The Bush administration failed to provide appropriate regulation, as we can see from the Madoff scandal and the revelations about the ratings agencies, complex financial instruments, etc. I'm sure we still don't know the whole story.

With respect to 2008, I believe the surge in oil prices pushed the economy over the edge as many more people, who were over-leveraged, were pushed into default.

 

[D H]

It wasn't just the democrats, or just the republicans, but rather I see both democrats and republicans being culpable - they all got their hand dirty. Everyone wanted growth in the economy, and they threw caution to the wind and failed regulate. Clinton and congress repealed the Glass-Steagal act, but failed to provide appropriate regulation subsequently. The Bush administration failed to provide appropriate regulation, as we can see from the Madoff scandal and the revelations about the ratings agencies, complex financial instruments, etc. I'm sure we still don't know the whole story.

With respect to 2008, I believe the surge in oil prices pushed the economy over the edge as many more people, who were over-leveraged, were pushed into default.

Nice summary.

Apparently the WSJ sees otherwise. What caused the meltdown? Northerners and atheists. From http://online.wsj.com/article/SB122714101083742715.html

It has been my view that the steady secularizing and insistent effort at dereligioning America has been dangerous. That danger flashed red in the fall into subprime personal behavior by borrowers and bankers, who after all are just people. Northerners and atheists who vilify Southern evangelicals are throwing out nurturers of useful virtue with the bathwater of obnoxious political opinions.

 

[Astronuc]

Apparently the WSJ sees otherwise. What caused the meltdown? Northerners and atheists. From http://online.wsj.com/article/SB122714101083742715.html

I would agree with Henninger -

What really went missing through the subprime mortgage years were the three Rs: responsibility, restraint and remorse. They are the ballast that stabilizes two better-known Rs from the world of free markets: risk and reward.

Responsibility and restraint are moral sentiments. Remorse is a product of conscience. None of these grow on trees. Each must be learned, taught, passed down.

Free markets only work with honest people.

How about this -
As if Things Weren't Bad Enough, Russian Professor Predicts End of U.S.
In Moscow, Igor Panarin's Forecasts Are All the Rage; America 'Disintegrates' in 2010
http://online.wsj.com/article/SB123051100709638419.html

MOSCOW -- For a decade, Russian academic Igor Panarin has been predicting the U.S. will fall apart in 2010. For most of that time, he admits, few took his argument -- that an economic and moral collapse will trigger a civil war and the eventual breakup of the U.S. -- very seriously. Now he's found an eager audience: Russian state media.

In recent weeks, he's been interviewed as much as twice a day about his predictions. "It's a record," says Prof. Panarin. "But I think the attention is going to grow even stronger."

Prof. Panarin, 50 years old, is not a fringe figure. A former KGB analyst, he is dean of the Russian Foreign Ministry's academy for future diplomats. He is invited to Kremlin receptions, lectures students, publishes books, and appears in the media as an expert on U.S.-Russia relations.

But it's his bleak forecast for the U.S. that is music to the ears of the Kremlin, which in recent years has blamed Washington for everything from instability in the Middle East to the global financial crisis. Mr. Panarin's views also fit neatly with the Kremlin's narrative that Russia is returning to its rightful place on the world stage after the weakness of the 1990s, when many feared that the country would go economically and politically bankrupt and break into separate territories.
. . . .

There is a local analyst who said much the same thing - that he sees the US is too large to govern and that it will break apart (I think he estimated within a decade). It appears there are folks who have vested interest in stirring up the pot and who encourage people to worry.

I guess if enough people start thinking along those lines, there would be a good chance of a new civil war - maybe reds vs blues?

 

[misgfool]

I would agree with Henninger -

I didn't quite understand. You would say that this mess was caused by atheists?

How about this -
As if Things Weren't Bad Enough, Russian Professor Predicts End of U.S.
In Moscow, Igor Panarin's Forecasts Are All the Rage; America 'Disintegrates' in 2010
http://online.wsj.com/article/SB123051100709638419.html
There is a local analyst who said much the same thing - that he sees the US is too large to govern and that it will break apart (I think he estimated within a decade). It appears there are folks who have vested interest in stirring up the pot and who encourage people to worry.

I guess if enough people start thinking along those lines, there would be a good chance of a new civil war - maybe reds vs blues?

I thought WSJ was not a tabloid. They must be losing readers real fast. Still I would reconsider before posting this kind of ****.

 

[Astronuc]

I agree with Henninger's assessment "What really went missing through the subprime mortgage years were the three Rs: responsibility, restraint and remorse."

I don't necessarily agree with everything said. Henninger is expressing his 'opinion'. The other article I cited is also an 'opinion'.

In opinion columns, the author's may generalize and speculate in addition to presenting some factual information. Reader beware.

 

[misgfool]

I don't necessarily agree with everything said. Henninger is expressing his 'opinion'. The other article I cited is also an 'opinion'.

In opinion columns, the author's may generalize and speculate in addition to presenting some factual information. Reader beware.

Well then, I couldn't find any facts backing up these opinions in the articles so my opinion is that they are ****. I still think that WSJ should keep itself above this ****. Ironically with these oil prices it is the professors motherland that has a dire situation.

 

[mheslep]

Nice summary.

Apparently the WSJ sees otherwise. What caused the meltdown? Northerners and atheists. From http://online.wsj.com/article/SB122714101083742715.html

Well, Daniel Henniger sees otherwise.

 

[mheslep]

...

It wasn't just the democrats, or just the republicans, but rather I see both democrats and republicans being culpable - they all got their hand dirty. Everyone wanted growth in the economy, and they threw caution to the wind and failed regulate. Clinton and congress repealed the Glass-Steagal act, but failed to provide appropriate regulation subsequently. The Bush administration failed to provide appropriate regulation, as we can see from the Madoff scandal and the revelations about the ratings agencies, complex financial instruments, etc.

I don't see how the Madoff case is a failure to provide regulation, any more than
a bank robbery illustrates a failure to provide regulation. Madoff was clearly a case of fraud, a ponzi scheme, albeit at very large scale, and the requisite laws have been on the books for eons. The government's failure in this case would seem to be an administrative one at the SEC. They investigated Madoff and missed it, perhaps via some internal corruption.

 

[mheslep]

I agree with Henninger's assessment "What really went missing through the subprime mortgage years were the three Rs: responsibility, restraint and remorse."

I don't necessarily agree with everything said. Henninger is expressing his 'opinion'. ...

Agreed.

 

[Astronuc]

I don't see how the Madoff case is a failure to provide regulation, any more than
a bank robbery illustrates a failure to provide regulation. Madoff was clearly a case of fraud, a ponzi scheme, albeit at very large scale, and the requisite laws have been on the books for eons. The government's failure in this case would seem to be an administrative one at the SEC. They investigated Madoff and missed it, perhaps via some internal corruption.

In the case of Madoff, I was thinking of the regulation by the SEC. I wonder why/how they missed it??

I'm also still puzzling about the reluctance/resistance to regulate derivatives markets.

Her appointment as a member of the CFTC, on April 15, 1994, came after a career as head of the firm's derivatives practice, where she represented clients in numerous complex litigation and arbitration cases involving financial market transactions.

While on the commission and, after becoming its chair two years later, Born tried to bring derivatives, specifically swaps that are traded at no central exchange, known as the dark market, and thus have no transparency except to the two counter-parties, under the regulatory oversight of the CFTC. She was opposed in this effort by Federal Reserve chairman Alan Greenspan, and Treasury Secretaries Robert Rubin and Lawrence Summers.[1] Specifically, on May 7, 1998, former SEC Chairman Arthur Levitt joined the other members of the President’s Working Group – Treasury Secretary Rubin and Federal Reserve Board Chairman Greenspan – in objecting to the issuance of the CFTC’s concept release, in which Born attempted to shed light on the dark market, citing grave concerns about the possible consequences of the CFTC’s action. In particular, these concerns focused on the risk that the report would increase legal uncertainty concerning swaps and other OTC derivative instruments and, thus, destabilize what had become a significant global financial market. The potential turmoil created by the report and concerns about the imposition of new regulatory costs also might have stifled innovation and pushed transactions offshore.[2] As the financial crisis of 2008 gained momentum, newspapers began reporting on what might be some of its causes, including the adversarial relationship Greenspan, Rubin and Levitt had with Brooksley Born, [3] with Greenspan leading the opposition, and how Born's recommendations were suppressed.[1] She is retired from Arnold & Porter and has declined to comment on the unfolding crisis.

http://en.wikipedia.org/wiki/Brooksley_Born (references the following WP article)

http://www.washingtonpost.com/wp-dyn/content/article/2008/10/14/AR2008101403343.html
That was clearly an issue during the Clinton administration, and they had 2+ years to deal with it.


Here an interesting reference that might be worth obtaining.

Restructuring Regulation and Financial Institutions By James R. Barth, R. Dan Brumbaugh
Derivatives and Their Participants

 

[mheslep]

In the case of Madoff, I was thinking of the regulation by the SEC. I wonder why/how they missed it??
...

There's something about an SEC lawyer marrying a Madoff. Yes, here:

One of the commission’s [SEC] investigative teams that had examined the Madoff firm was headed by a lawyer named Eric Swanson, who served for 10 years as a lawyer at the commission and left in 2006 whilehe was an assistant director of the office of compliance inspections and examinations in Washington.

In 2007, Mr. Swanson married Shana Madoff, a niece of Bernard L. Madoff and daughter of his brother, Peter Madoff, the firm’s chief compliance officer. Ms. Madoff is the firm’s compliance attorney.

Eric Starkman, a spokesman for Mr. Swanson, said that Mr. Swanson’s “romantic relationship with his wife began years after the compliance team he helped supervise made an inquiry about Bernard Madoff’s securities operations.”

That smells, but who knows. I'm more inclined to think the SEC was behaving normally, just with the efficiency of the post office or my DMV, "Fill out some forms and we'll get back to you" being the common refrain
http://www.nytimes.com/2008/12/17/business/17madoff.html?fta=yHarry Markopolos 10 year crusade to get Madoff.
http://money.cnn.com/news/newsfeeds/siliconalley/search/2008_12_busting_bernie_madoff_one_mans_10_year_crusade.html

 

[Proton Soup]

For what? First goes Franklin Raines, then anybody else like Corn trying hide the GSE's culpability in this.

Here's President Clinton on Gramm's bill:

MARIA BARTIROMO

Mr. President, in 1999 you signed a bill essentially rolling back Glass-Steagall and deregulating banking. In light of what has gone on, do you regret that decision?
FORMER PRESIDENT BILL CLINTON

No, because it wasn't a complete deregulation at all. We still have heavy regulations and insurance on bank deposits, requirements on banks for capital and for disclosure. I thought at the time that it might lead to more stable investments and a reduced pressure on Wall Street to produce quarterly profits that were always bigger than the previous quarter. But I have really thought about this a lot. I don't see that signing that bill had anything to do with the current crisis. Indeed, one of the things that has helped stabilize the current situation as much as it has is the purchase of Merrill Lynch (MER) by Bank of America (BAC), which was much smoother than it would have been if I hadn't signed that bill.

http://www.businessweek.com/magazine/content/08_40/b4102000409948.htm

 

[Astronuc]

Watch the hype in 2009

PAUL B. FARRELL
Don't buy Wall Street's latest con
Here are 15 reminders of how happy talk misled us a decade ago

We all know humorists turn out to be better prognosticators than all of Wall Street's self-interested happy-talking hustlers. Why? Because comedians, satirists and jesters just tell the truth; they're painfully funny and they're usually right. That was mid-July -- before the big crash, before Washington's mega-billion-dollar bailout giveaways to their screw-up buddies on Wall Street.

The Onion added, rather prophetically we must warn you: "Congress is currently considering an emergency economic-stimulus measure, tentatively called the Bubble Act." Of course the White House incidentally changed the name from "Bubble Act" to TARP, but the faux prophecy clearly exposes a classic truth:

"The U.S. economy cannot survive on sound investments alone ... Perhaps the new bubble could have something to do with watching movies on cell phones ... Or, say, medicine or shipping. Or clouds." But note, the "manner of bubble isn't important, just as long as it creates a hugely overvalued market based on nothing more than whimsical fantasy and saddled with the potential for a long-term accrual of debts that will never be paid back, thereby unleashing a ripple effect that will take nearly a decade to correct."

In short, no matter how destructive to America, Wall Street wants, needs, demands and, yes, has a passionate love affair with blowing bubbles. It's in their blood. Wall Street is the ultimate bubble-blower, will be for all eternity, in bear markets and bulls, world without end.

Some people are so cynical.

 

[Astronuc]

Wealth of U.S. millionaires down 30 percent: survey
http://news.yahoo.com/s/nm/20090106/us_nm/us_financial_usa_wealth

NEW YORK (Reuters) – American millionaires have seen their assets shrink by 30 percent during the economic crisis, a report said on Tuesday, with only 36 percent of them pleased with the performance of their financial advisers.

Of U.S. households worth $1 million or more, 55 percent are concerned they will not have enough assets to maintain their lifestyles, said Spectrem Group, a consulting firm specializing in the affluent and retirement markets.
. . . .
"While they blame the government and Wall Street directly for the situation, many millionaires are not happy with their advisors' performance and few say they will increase the work they give to advisors," said Catherine McBreen, managing director of Spectrem Group.
. . . .
Seventeen percent of the millionaires took hits to their portfolios of more than 40 percent, according to the report "Attitudes of Affluent Investors on Surviving the Economic Crisis."
. . . .

Easy come, easy go.


Even Warren Buffett had a down year.

Buffett Has ‘Nowhere to Hide’ Amid Berkshire’s Plunge
http://www.bloomberg.com/apps/news?pid=20601109

Jan. 2 (Bloomberg) -- Billionaire Warren Buffett’s Berkshire Hathaway Inc. slumped 32 percent last year, the worst performance in more than three decades, as the U.S. recession forced down the value of the firm’s equity holdings and derivative bets.

Most of the stock decline happened in the last three months as Berkshire posted a fourth straight profit drop amid sagging insurance results. The company still beat the 38 percent tumble of the Standard & Poor’s 500 Index, the 14th year in 20 that Buffett outperformed the benchmark. Just six of 1,591 U.S. stock mutual funds with at least $250 million in assets made money for investors last year, according to data compiled by Bloomberg.

“In 2008, there was nowhere to hide,” said Guy Spier, chief investment officer at Aquamarine Capital Management, which holds shares in the Omaha, Nebraska-based company. “Berkshire can’t escape the general fate of American businesses. What Buffett tries to do is ensure that Berkshire Hathaway does less badly than other companies.”

Buffett, 78, poured money into stocks as prices fell and increased Berkshire’s pace of deals as the contraction in credit markets hobbled buyout firms. Buffett spent about $3.9 billion on equities in the third quarter, making Berkshire the biggest shareholder in ConocoPhillips, the second-largest U.S. refiner. Berkshire announced 12 acquisitions in 2008, compared with eight in 2007, and also agreed to buy $8 billion in preferred shares from Goldman Sachs Group Inc. and General Electric Co.

. . . .

Perhaps Buffett should have waited for lower prices.

 

[Astronuc]

ALCOA to lay off 13,500 workers, freeze salaries and cut spending by 50%
MarketWatch - Late Tuesday Alcoa said it plans to cut 13% of its global workforce, sell four business units, cut output, freeze salaries and hiring efforts. The Pittsburgh-based aluminum giant said it is taking the steps to conserve cash in the current economic downturn. The meausures will result in a fourth-quarter charge of $900 million to $950 million after tax, or $1.13 to $1.19 a share.

Alcoa to slash 13,500 jobs and cut production
http://biz.yahoo.com/rb/090106/business_us_alcoa.html

Reuters - The company said it was reducing its smelting output by 750,000 tonnes per year, which is approximately 18 percent of total primary aluminum output, and selling four non-core businesses.

It is also cutting an additional 1,700 contractor positions and freezing salaries and hiring. It is reducing 2009 capital expenditures by 50 percent, Alcoa said.

Fed sees longer economic decline than earlier forecasts
http://biz.yahoo.com/cnnm/090106/010609_fed_minutes.html

The U.S. economy is likely to deteriorate further this year and unemployment will rise into 2010, according to the latest forecasts from the staff of the Federal Reserve.

This bleak forecast was presented to Fed policymakers when they met last month and lowered interest rates to near zero. Low interest rates are one key tool the central bank uses to try to spur economic activity.
. . . .

Let's see what happens by the end of the week.

 

[Astronuc]

Cheney: No one saw economic crisis coming
http://news.yahoo.com/s/ap/20090109/ap_on_go_pr_wh/cheney_interview

In an interview with The Associated Press, Cheney also said that Bush has no need to apologize for not foreseeing the economic crisis.

"I don't think he needs to apologize. I think what he needed to do is take bold, aggressive action and he has," Cheney said.

"I don't think anybody saw it coming," he said.

. . . .

They certainly didn't.

 

[Astronuc]

Stock futures point lower ahead of trade report
http://biz.yahoo.com/ap/090113/wall_street.html
By Sara Lepro, AP Business Writer (Tuesday January 13, 7:12 am ET)
Wall Street appears ready to extend losses, investors uneasy about profit, trade reports

NEW YORK (AP) -- Wall Street appeared ready to extend its losses Tuesday as investors already uneasy about weak corporate profit reports awaited a reading on overseas demand for U.S. products.

The Commerce Department will release monthly trade data for November at 8:30 a.m. Eastern time. Wall Street expects the U.S. trade deficit narrowed significantly as oil prices fell. U.S. imports of other products are also expected to have fallen in November, reflecting the deepening recession. But at the same time, spreading weakness overseas has sharply curbed demand for American exports, which until recently had been the one bright spot for the U.S. economy.

Asian and European equities markets are down in response to poor earnings (or losses) and continued weakness in the US economy.

Alcoa reported losing $1.19 billion in 4Q as demand for aluminum plunged. Other companies also are warning that their results are being hit hard by the recession.

Sony may post first operating loss in 14 years.

http://biz.yahoo.com/ap/090113/world_markets.html

Look here (after 0830 EST today for Nov 2008) for trade summary - http://www.census.gov/indicator/www/ustrade.html

 

[Astronuc]

Some good news -

Nov. trade deficit drops to lowest level since '03
Trade deficit in Nov. plunges to lowest level in 5 years as oil imports drop by record amount

WASHINGTON (AP) -- The trade deficit plunged to the lowest level in five years in November as a deepening recession slashed demand for oil by a record amount. Imports from China also fell by the largest amount on record.

The Commerce Department says the trade deficit narrowed to $40.4 billion in November, a 28.7 percent decline from October's deficit of $56.7 billion. The bigger-than-expected decrease left the deficit at its lowest level since November 2003.

The trade deficit through November is running at an annual rate of $688.2 billion, down from the 2007 imbalance of $700.3 billion. The 2007 deficit had represented the first decline after five years of record highs.

. . . .

Steep drop in imports, but exports are also falling.

Oil falls below $37 on gloomy demand outlook
http://biz.yahoo.com/ap/090113/oil_prices.html

 

[wolram]

History tells us that economies (world domination) decline, why should the US be unique, the only way you could be is if you were self sufficient and leaders of technology, as much as i love you guys, the threat of terrorism is draining your economy, and you are not self sufficient, so your economy will decline.

 

[Jimmy Snyder]

... your (United States) economy will decline.

That's one hell of a prediction wolram. When do you figure it will happen?

 

[wolram]

That's one hell of a prediction wolram. When do you figure it will happen?

When your budget against terrorism exceeds your countries income, or terrorism er rodes your income, you are not self deficient.

 

[mgb_phys]

When your budget against terrorism exceeds your countries income, or terrorism er rodes your income, you are not self deficient.

The budget against terrorism is tiny and it all gets spent either on minimum wage mall-cops at airports or on security contracts that you give to your own defence companies. It's really just a slightly annoying version of the dig-a-hole, fill in-a-hole YTS schemes the UK used to run.

You only really have to worry when you have no natural resources and no industry, you make all your money on 'services' and you have a 3rd world currency that nobody wants.
ps. Anybody want to buy my house there!

 

[mheslep]

When your budget against terrorism exceeds your countries income, or terrorism er rodes your income, you are not self deficient.

I am frequently self deficient.

 

[wolram]

The budget against terrorism is tiny and it all gets spent either on minimum wage mall-cops at airports or on security contracts that you give to your own defence companies. It's really just a slightly annoying version of the dig-a-hole, fill in-a-hole YTS schemes the UK used to run.

You only really have to worry when you have no natural resources and no industry you make all your money on 'services' and you have a 3rd world currency that nobody wants.
ps. Anybody want to buy my house there!

True, but as your country wants resouces, who will guaratee that they will be given ,you will have to fight more and more for them ,who will gurantee that the USA will be given preference?

 

[mheslep]

True, but as your country wants resouces, who will guaratee that they will be given ,you will have to fight more and more for them ,who will gurantee that the USA will be given preference?

Wolram - I am curious, could you lay a finger on a particular news source or group (e.g. Guardian, Times?) on which you construct these views? That is, the view that the US is running out of resources, that 'terrorism' or even defense spending in general is the majority of US spending, and so on?

 

[misgfool]

Wolram - I am curious, could you lay a finger on a particular news source or group (e.g. Guardian, Times?) on which you construct these views? That is, the view that the US is running out of resources, that 'terrorism' or even defense spending in general is the majority of US spending, and so on?

I think it's part of a more general antipathy against the US in Europe. Additionally the US has made a lot of decisions in this decade which have lead to a clear decline in it's reputation. Especially unfortunate has been tolerance towards torturing.

 

[wolram]

Wolram - I am curious, could you lay a finger on a particular news source or group (e.g. Guardian, Times?) on which you construct these views? That is, the view that the US is running out of resources, that 'terrorism' or even defense spending in general is the majority of US spending, and so on?

Look to history books, no nation will be eternally the super power, i just think the reasons i have given will be a factor in the fall of the US.

 

[mgb_phys]

Looking on the bright side "US trade deficit at five-year low"
http://news.bbc.co.uk/2/hi/business/7826651.stm

 

[mheslep]

I think it's part of a more general antipathy against the US in Europe. Additionally the US has made a lot of decisions in this decade which have lead to a clear decline in it's reputation. Especially unfortunate has been tolerance towards torturing.

Well that's one thing. For that matter, one doesn't have to have much of any reason at all to dislike another country, but Wolram say's '...I love you guys', as in we're on the road to ruin and he mentions some some reasons why.

Look to history books, no nation will be eternally the super power, i just think the reasons i have given will be a factor in the fall of the US.

Well I venture that most American's don't forever want to be the only super power, rather, they generally want to be prosperous, free, secure, and have the opportunity for happiness. If that could be insured with half or a quarter of the present defense budget, the budget would go there, with some yelling and gnashing of teeth from the industry but decline it would. Personally I could care little about the US being a super power if the other conditions were met.*

I was more interested in the immediate reasons why Wolram might think a US collapse is near. If it is, it is clearly not because the US is starved of physical resources or needs to go fight for them, we have ample within our economic means (if intelligently managed), and in the list of stresses on our government spending, defense spending is not the big problem, entitlements are - the 'structural deficit' being the phrase currently favoured by the President - elect.

* One of the measures that would help allow the US retire the super power crown is for the EU to step up and carry more of the military load for NATO.

 

[Astronuc]

Well I venture that most American's don't forever want to be the only super power, rather, they generally want to be prosperous, free, secure, and have the opportunity for happiness. If that could be insured with half or a quarter of the present defense budget, the budget would go there, with some yelling and gnashing of teeth from the industry but decline it would. Personally I could care little about the US being a super power if the other conditions were met.*

I was more interested in the immediate reasons why Wolram might think a US collapse is near. If it is, it is clearly not because the US is starved of physical resources or needs to go fight for them, we have ample within our economic means (if intelligently managed), and in the list of stresses on our government spending, defense spending is not the big problem, entitlements are - the 'structural deficit' being the phrase currently favoured by the President - elect.

* One of the measures that would help allow the US retire the super power crown is for the EU to step up and carry more of the military load for NATO.

This seems to reflect my experience as well.

Meanwhile Nortel Networks has filed Chapter 11 bankruptcy.
http://news.yahoo.com/s/nm/20090114/ts_nm/us_nortel

. . . .
According to the court filing in U.S. bankruptcy court for the district of Delaware, Nortel's major creditors include Bank of New York Mellon, with claims valued at nearly $4 billion.

Nortel's shares have tumbled along with the company's fortunes, sinking into penny-stock territory in recent months. In mid-2000, at the zenith of the company's success, they were worth more than C$1,100 each, adjusted for a stock consolidation that took place in late 2006.

"It's obviously a remarkable transformation from where it was as the largest company in Canada worth about 35 percent of the TSX in 2000," said Gavin Graham, director of investments at BMO Asset Management.

"But this is a reflection of the way that the telecommunications industry has changed."

Nortel has faced intense competition from North American and European rivals such as Alcatel-Lucent, as well as low-cost Asian vendors such as Huawei Technologies.
. . . .

Retail sales plummet 2.7 percent in December
http://news.yahoo.com/s/ap/20090114/ap_on_bi_go_ec_fi/economy

And the Dow30 were down about 2.8% in the first hour of trading, and has been down as much as 300 pts this morning.

 

[misgfool]

Well that's one thing. For that matter, one doesn't have to have much of any reason at all to dislike another country,

Ehh.. well no need to give any more reasons.

Well I venture that most American's don't forever want to be the only super power, rather, they generally want to be prosperous, free, secure, and have the opportunity for happiness. If that could be insured with half or a quarter of the present defense budget, the budget would go there, with some yelling and gnashing of teeth from the industry but decline it would. Personally I could care little about the US being a super power if the other conditions were met.*

I bet the romans felt the same way. But they couldn't get prosperity, freedom, secury etc. So they satisfied with the second best thing, which was the greatness of Rome.

I was more interested in the immediate reasons why Wolram might think a US collapse is near. If it is, it is clearly not because the US is starved of physical resources or needs to go fight for them, we have ample within our economic means (if intelligently managed), and in the list of stresses on our government spending, defense spending is not the big problem, entitlements are - the 'structural deficit' being the phrase currently favoured by the President - elect.

I can't see any immediate catastrophic collapse ahead, but Wolram is right in saying that all empires of the past have fallen.

* One of the measures that would help allow the US retire the super power crown is for the EU to step up and carry more of the military load for NATO.

NATO isn't only a burden. NATO is the worlds biggest weapons fair. It's a marketing subsidy to the US military industry by the US government. And the US isn't a superpower because of NATO. It's those 5000+ nukes.

 

[edward]

The Ascent OF Money.

In THE ASCENT OF MONEY, Niall Ferguson traces the evolution of money and demonstrates that financial history is the essential back-story behind all history.

http://www.pbs.org/wnet/ascentofmoney/featured/watch-full-program-the-ascent-of-money/24/

This is a 2 hr documentary broken up into short segments. a good watch if you have the time.

 

[mheslep]

NATO isn't only a burden. NATO is the worlds biggest weapons fair. It's a marketing subsidy to the US military industry by the US government. And the US isn't a superpower because of NATO.

Eh? You misread me, I didnt say NATO was a burden, and I didn't say (the opposite) NATO makes the US a super power. I say that NATO is insufficient. The US need not be, would not want to be a superpower if the EU part of NATO stepped up.

It's those 5000+ nukes.

Since they have not been used in the post WWII world and realistically can't ever be used outside of an all out of a civilization ending WWIII, one would have to say its the often used conventional aspect of the US military that makes it 'super.'

The three parts of US superpower status per N. Ferguson:
1. Military
2. Economic. ~1/5 of world GDP.
3. Cultural. English language, etc.

 

[misgfool]

Eh? You misread me, I didnt say NATO was a burden, and I didn't say (the opposite) NATO makes the US a super power. I say that NATO is insufficient. The US need not be, would not want to be a superpower if the EU part of NATO stepped up.

Even if EU would assume more responsibility in NATO, what would prevent the US of claiming that NATO was not doing it's duties and campaigning on it's own?

Since they have not been used in the post WWII world and realistically can't ever be used outside of an all out of a civilization ending WWIII, one would have to say its the often used conventional aspect of the US military that makes it 'super.'

I don't doubt the firepower that the US has, but you can't say that the adversaries since WWII have been the toughest on the planet.