patrick.net

S&P 500 is an excellent inflation hedge tho, as good as gold if not better.

The dollar is trending strong against the Euro, very strong against the yen, very strong against the yuan (as usual), and trending weak against the CDN.

AFAICT, this gives some more firepower for the Fed to do another round of QE. Canada, being our commodity producer, will likely find its currency strengthening along with the rest of our trading partners.

OTOH, I'm not the biggest Elliot Wave proponent but any idiot looking at the S&P 500 since February can tell you we're probably just getting into a wave 3 of 5 (down). Today's close brought us under the January 2010 highs, which were resistance on the upside at the start of this year. If this 1150 resistance fails to be resistance on the downside then look out below since everyone will start jumping out of the market like they did in late 2008.

But I don't believe in chartology as much as fundamentals, and "following the money".

Is J6P in better or worse shape than a year ago?

Is wage inflation coming or is J6P going to the wall this cycle? What's going to happen when the five million people on extended unemployment run through their benefits this year? That's a $100B stimulus, worth TWO MILLION $50K/yr J6P jobs right there.

My general opinion is that we're back into the same sh--ty economy of 2002-2003, except with a lot more debt, triple the oil prices, even more entrenched trade deficit with China.

This is deflationary, and I see corporate profits coming under continued stress, unless the powers-that-be figure out how to "turn the machines back on", ie. get some spending money into the consumers' pockets like what the housing bubble did for most people. I just learned my sister was able to pull $100K out of their house in 2007, money that was spent on improvements and paying down the credit cards. Unfortunately, while they bought early in the game in 2001 they're now about $150K underwater, thanks to the HELOC and a rather unwise "move up" buy in 2003.

My gut sense is that massive, global forces are going to continue to crush the middle class, just as the 90s were a merciless grinding action on Japan's over-extended middle class. Like Japan, I think we're going to draw things out and keep the wheels kinda on the cart with massive QE and unsterilized debt issuance, both to the Fed's balance sheet and whatever other mechanisms we can think of.

Here's a comparison of the S&P 500 vs the Nikkei:

http://finance.yahoo.com/q/bc?s=%5EGSPC&t=my&l=on&z=m&q=l&c=%5En225

Taking the second hump in the S&P that ran from 2005-2007 as bull----, continued tracking down from here does not appear that unlikely.

You want to see the S&P break 1500, Walmart's going to have to be paying $15/hr in wages.

Gas going to $10 -- Unlikely? Interest rates going to 10% -- Unlikely? Another stupid war somewhere -- Unlikely? Taxes going up / gov't spending going down -- Unlikely?

Any sort of optimism about this decade is rather misplaced, AFAICT. Social Security just went negative, Medicare is going to blow up its "trust fund" in a year or two, and, oh, the middle year of the front wave of the baby boomers (born in 1950) is starting to turn 60 this year.

Troy says

S&P 500 is an excellent inflation hedge tho, as good as gold if not better.

Stock is so-so against inflation.

If the company's stock is at $10 and the earning is $1. The return is 10% per year. Great!

If the inflation goes to 100%, workers' wage, goods' price and earning all double.
If the company's stock is still at $10 and the earning is $2. The return is 20% per year.

Wait. The inflation is 100% and the return is 20%. That is not good.
Guess what? the stock price will drop to $2 :)

Even the stock price stays at $10. That is not good because the price for all goods and services doubled and you still only have $10.

Gold is the true inflation counter here.

Even real estate is no good. Because the bank will charge 100% interest rate per year, no one has that much money to get the mortgage.

Troy, thanks for the response. It's very educational and it shows exactly what I believe is going on at the moment. We really have no "there" there in our economy, to put it in layman's terms. The middle class is tapped out for cash. The upper 1-10% are holding onto their money and trying their best to swindle any remaining cash out of the middle class with loan slavery and wage slavery. I believe that our society is becoming feudal. We the worker serfs work for our masters, the super-wealthy, creating wealth way up above without seeing any real income from our labors. And I don't see that changing.

If only the super-rich would realize that if they paid their workers a living wage that would allow them to buy goods and services, the economy would get going again and we could create more wealth rather than see a continued contraction.

But alas, the super-rich don't care about anyone but themselves so we're going to continue to see this assault on the middle class and the workers for at least another decade. Unless one of "them" at the top starts investing some capital in "the little guy" we're going to remain stuck.

Market may crash. Or maybe not. Thanks Kreskin!

What's most interesting to me is the disconnect between the reality on the ground and the numbers in the ether.

In theory, money represents something about reality. Control over labor, or claims against real property or whatever.

But via a long slow process of increasing debt, money had become very abstract when considered in large amounts. Back on the ground, land, labor, and physical capital are still real, and still pretty much what they were ten years ago. Joe six-pack has to work an hour to buy his six-pack, which is now $10. But so what? He had to work an hour for his six-pack ten years ago.

A hundred million Americans thought they escaped the basic math of time and labor by overpaying for a house, driving up its market price, and making it "worth" what they said it was, for a brief shining moment. And the banks who financed them thought the same, proving that fools and money can co-exist. Borrowing money creates money! Perpetual motion! Reversal of entropy!

But reality is not fooled. The debts cannot be paid, because there are no more workers or hours in a day than there were before. The banks and "homeowners" writhe in pain! All that beautiful fantasy, melting, melting! Can't we just sell our neighbor's children? No? How about selling the future? Oh, that's original problem again, isn't it?

Now the masks come off and we see that it's not a democracy at all. We have no way to audit the Fed or stop the Fed from transferring the banks' bad debts to the public. The banks were always perfectly willing to sacrifice the rest of us if it became necessary to save the banks, and it has become necessary. The banks' imaginary debt is being transformed into real demands on our labor, and a lower standard of living.

The right answer is to put the fear of failure into the banks. End the Fed, let the bad banks die.

I don't know about ending the Fed. I do want it audited and smacked around and forced to account for itself.

We definitely should let banks fall. And we should have created new banks in their wake. But the oligarchy wouldn't ever let that happen.

xenogear3 says

Stock is so-so against inflation.
If the company’s stock is at $10 and the earning is $1. The return is 10% per year. Great!
If the inflation goes to 100%, workers’ wage, goods’ price and earning all double.
If the company’s stock is still at $10 and the earning is $2. The return is 20% per year.
Wait. The inflation is 100% and the return is 20%. That is not good.
Guess what? the stock price will drop to $2
Even the stock price stays at $10. That is not good because the price for all goods and services doubled and you still only have $10.
Gold is the true inflation counter here.
Even real estate is no good. Because the bank will charge 100% interest rate per year, no one has that much money to get the mortgage.

Unlikely! Our region, Silicon Valley is deflationary, all due from the global competition. When did you ever see local employers raise prices for goods and services. Yes, we had inflation over the past 10-15 years around 50% but the result has NOT been increase in salaries and benefits, the exact opposite has happened. How could there be! Products today are selling for less than half what they were selling for back 10/15 years ago regardless of inflation.

Wanna buy a Netbook for $200 dollars!

I've been steadily getting raises basically every year, even through these last couple of years.

"Unlikely! Our region, Silicon Valley is deflationary, all due from the global competition. When did you ever see local employers raise prices for goods and services. Yes, we had inflation over the past 10-15 years around 50% but the result has NOT been increase in salaries and benefits, the exact opposite has happened."

Quarterly Census of Employment and Wages http://data.bls.gov:8080/PDQ/servlet/SurveyOutputServlet;jsessionid=6230fceb6520c7513257

Series Id: ENU0608540010State: CaliforniaArea: Santa Clara County, CaliforniaIndustry: Total, all industriesOwner: Total CoveredSize: All establishment sizesType: Average Weekly Wage

Download: Year Qtr1 Qtr2 Qtr3 Qtr4 Annual
2001 1330 1249 1188 1302 1268
2002 1252 1185 1172 1241 1213
2003 1237 1224 1269 1331 1265
2004 1343 1292 1309 1464 1353
2005 1375 1316 1405 1494 1398
2006 1581 1386 1415 1569 1488
2007 1585 1506 1586 1699 1594
2008 1589 1528 1530 1569 1554
2009 1519(P) 1451(P) 1506(P)
P : Preliminary.

From the bureau of labor statistic for Santa Clara County, CA. looks like there has in fact been salaries and benefits inflation after the dot-com bust. Weekly salaries went from about 1,268 in 2001 to about 1,492 in 2009, about 2.4% annually.

In 1994, weekly wages in Santa Clara County would be about 1,050, which would bring wage inflation of 40% the last 15 years or so, exactly in line with inflation.

xenogear3 says

Troy says

S&P 500 is an excellent inflation hedge tho, as good as gold if not better.

Stock is so-so against inflation.
If the company’s stock is at $10 and the earning is $1. The return is 10% per year. Great!
If the inflation goes to 100%, workers’ wage, goods’ price and earning all double.
If the company’s stock is still at $10 and the earning is $2. The return is 20% per year.
Wait. The inflation is 100% and the return is 20%. That is not good.
Guess what? the stock price will drop to $2
Even the stock price stays at $10. That is not good because the price for all goods and services doubled and you still only have $10.
Gold is the true inflation counter here.
Even real estate is no good. Because the bank will charge 100% interest rate per year, no one has that much money to get the mortgage.

1) holding bonds and other long term fixed income vehicle at low rates will be awful in an inflation environment. But, great if you are borrowing not lending.
2) cost more to acquire the same good/service.

From that context, buying a home at low long term mortgage is an exceptional inflation hedge (noywithstanding all the other factors). Stock has traditional outperformed inflation so unless othewise noted, stocks should do well in an inflation environment as well.

^ ace,

When I look at that chart I see that wages topped out at 1699 in the 4th quarter of 2007 (during the bubble). Now the preliminary in Qtr 3 of 2009 shows that wages are 1506. That's a drop of $193 per week! It doesn't seem like wages are going up since the recession started. In fact, there is deflation since the recession started.

Sure, go back 15 years and come forward and any wage graph for any county will show inflation. What I'm concerned with is the wages since that 4th quarter of 2007. For the past two years running we see that wages are dropping in Santa Clara County (and where are the numbers for the end of 2009 beginning of 2010?)

Oh, and real inflation (the cost of food, gas and other things that seem to get left out of inflation figures) has gone up much more than 2.4% pre-bubble. So real wages actually were stagnant or decreasing.

pkennedy, glad you're luck is holding out. Our wages at our agency have been frozen for over a year now and there is no sign that there will be any increases in the near future. Last year we got slapped twice. Our health insurance premiums jumped $90 per month, while our wages were frozen. We are expecting increases for July 2010 in our health insurance premiums without any wage increases again. They claim that the increases won't be as drastic as last year ($90 per month is a lot when most of our staff makes less than $15 an hour). And we do very important work. We work with youth that society has thrown away. And we get very little reward for doing it.

I hope you're luck continues to hold out.

@simchaland,

yes, it's obvious that 8M+ job losses in 18 months will cause wage deflation. In the SF bay area private sector, during the boom times, people get 30% raises to leave a company to work for another company while recently people are taking 30% pay cuts to work. Most existing employees pay were stable, albeit expected to work more for the same pay the last 2 years.

(I think the difference between me and someone else is if I was going to base a purchasing decision on buying, I would model in 2% inflation whereas someone more pessimistic will model in negative inflation based on what happened the last 3 years)

But wage inflation/deflation should be put into proper context to account for boom and recession times. In this case, smoothing out booms and recession, wages go up about 2.5% a year. From that perspective, I am willing to bet short term wages likely bottomed/flattened sometime in 2009.

Real inflation has been going up at a higher rate. This is devastating if you are paycheck to paycheck. However, if you have working capital, that is the difference the rich being richer. I can say without a doubt that the rich grows their assets at a much faster rate than 2.5%. I bet the number of bay area millionaires have been going up at a rate of 4-6% annually for the past 10-15 years.

SF ace says

From the bureau of labor statistic for Santa Clara County, CA. looks like there has in fact been salaries and benefits inflation after the dot-com bust. Weekly salaries went from about 1,268 in 2001 to about 1,492 in 2009, about 2.4% annually.
In 1994, weekly wages in Santa Clara County would be about 1,050, which would bring wage inflation of 40% the last 15 years or so, exactly in line with inflation.

Like I said, have you EVER seen prices of goods and services for High Tech products ever go up! I wish they did, as do many of us who work in tech, I would be great, but it hasnt happened. Think about that for a moment ! That is tech deflation, its been like this for 20 years.

SF ace says

yes, it’s obvious that 8M+ job losses in 18 months will cause wage deflation. In the SF bay area private sector, during the boom times, people get 30% raises to leave a company to work for another company while recently people are taking 30% pay cuts to work.

Very few at that and only if its a promotion and extreme circumstances. Workers do not make lateral moves and get 30% increases. Every employer goes off the Bradford Compensation Guide for this region as well as your past payroll history and budget constraints. There are fewer and fewer jobs here and plenty of SV jobs in other states.

"Like I said, have you EVER seen prices of goods and services for High Tech products ever go up! I wish they did, as do many of us who work in tech, I would be great, but it hasnt happened. Think about that for a moment ! That is tech deflation, its been like this for 20 years."

Thomas, you should know better that. We both know that in the semi industry gross margin is the true barometer for pricing health. In 1992-1994, Intel's Gross margin were in the 30% range, in 1998, gross margin went to the 60% range, went back down to around 50% in 2001 and back to low 60's by 2004 and around high 50's now. So yes, price goes up and down, but based on your definition, tech goods and service does not go up in absolute terms. From my perspective, if gross margins are up that is price inflation in the semi world.

"Very few at that and only if its a promotion and extreme circumstances. Workers do not make lateral moves and get 30% increases. Every employer goes off the Bradford Compensation Guide for this region as well as your past payroll history and budget constraints. There are fewer and fewer jobs here and plenty of SV jobs in other states."

Of course those increase are a thing of the past currently, but those were absolutely the norm back in 1999 and 2006 and push the compensation guide up as well. Big salary increase always come and go in cycles.

SF ace says

Of course those increase are a thing of the past currently, but those were absolutely the norm back in 1999 and 2006 and push the compensation guide up as well. Big salary increase always come and go in cycles.

(sarcasm)And never forget that the Bay Area is special. And SV is even specialler so that means that wages will be going up 30% for lateral moves there in no time. Just watch. (/sarcasm)

SF ace says

Thomas, you should know better that. We both know that in the semi industry gross margin is the true barometer for pricing health. In 1992-1994, Intel’s Gross margin were in the 30% range, in 1998, gross margin went to the 60% range, went back down to around 50% in 2001 and back to low 60’s by 2004 and around high 50’s now.

Intel like the other Semi companies jettisoned their profitable DRAM business after the Japanese dumped their products below costs back in the 80s. The margins were 50-55%. LOL! i used to work there. Today Intels business is centered around their near monoply on CPUs except that AMD once again has similar product and does compete with prices cuts on cpus, which have gone down. Today, most semis are fabless with all manufacturing costs coming from cheaper outsourced overseas... Asia.
Why is that ? Why did we move all our mfg out of SV?

Have you ever worked on a sales deal, deals in the millions where customers want 15-20% off list prices plus concessions for this or that else they walk to the competition? Happens everyday!!!

SF ace says

I bet the number of bay area millionaires have been going up at a rate of 4-6% annually for the past 10-15 years.

The millions were made from unexpensed stock options on companies highly inflated stock prices.
Today, stock options are expensed to the PL and are not given out so liberally. Its a different world out there, than 1999. Was Yahoo ever really worth 300 per share or Ariba $600 per share ? Wealth wasnt created .. it was taken away from someone else....

thomas.wong1986 says

Was Yahoo ever really worth 300 per share or Ariba $600 per share ? Wealth wasnt created . .

I disagree with this. For one, Yahoo at $300 didn't take money from anyone (who didn't buy at the inflated prices). Total market cap is like total assessed value of all land in the US, it's irrelevant because there's no buy-side large enough to make a market to liquidate the stock at this peak valuation.

And 2), if the world survives to 2100 it's going to be built on high tech that we probably can't even dream of today. Machine translation between foreign languages that works. Virtual meetings just as good as being in the same room. Robots making robots and computers programming themselves. People buying WoW pods to play WoW for months at a time w/o a break. Bandwidth in the EM too cheap to meter. OK, LOL on the last one.

To coin some new terms now, let's call "Direct Wealth" that which satisfies human needs and wants. Indirect wealth would be that which is involved in the creation of direct wealth (and is otherwise known as Capital). Compared to 1980, we've come a long way in developing wealth-creating technologies, and I don't see why 2040 is going to be any less advanced from now as we now are from the beginning of the PC revolution 30 years ago. Computers, networks, and software will be improving our lives more and making us more productive in actual direct wealth-creation and preservation, too.

Now, granted, compared to 2000 things aren't all that advanced in 2010, though perhaps comparing the 4G iPhone coming out RSN compared to the Nokias of ten years ago may be instructive.

We've got the W3C and WHATG, and all the major browser makers pretty much pulling together a nifty unified web platform with HTML5, that's going to facilitate further development of cheaper, faster, and better web software. Google didn't have a public footprint 10 years ago. . . I expect great things out of it, since they're pretty big on collecting the smartest people they can find who want to work for them and putting them on interesting tech problems.

Nomo, I think you have something there.

I know too many unemployed techies who are "holding out" so that they can get paid "what they're worth." They don't seem to understand that they are worth only what the economy is willing to pay for their services. Pride is a nasty task master.

What's wrong with starting over? I've done it a couple of times in my life. I've had at least 4 career paths in my life. I think I'm on my last one, but who knows? Something may change.

The best workers these days are workers who can be flexible and learn something new and use it to their advantage. Those who are stuck in one industry are "one shot" workers. Today's economy requires the ability to retrain, retool, and get more education to allow for the greatest flexibility. I almost feel sorry for the techies that I know who can't find their $150k dream jobs anymore. Almost...

Oh and the DOW fell over 300 points today. Double dip?

http://money.cnn.com/2010/05/20/markets/markets_newyork/index.htm

Troy says

To coin some new terms now, let’s call “Direct Wealth” that which satisfies human needs and wants. Indirect wealth would be that which is involved in the creation of direct wealth (and is otherwise known as Capital). Compared to 1980, we’ve come a long way in developing wealth-creating technologies, and I don’t see why 2040 is going to be any less advanced from now as we now are from the beginning of the PC revolution 30 years ago. Computers, networks, and software will be improving our lives more and making us more productive in actual direct wealth-creation and preservation, too.

The needs of corporate buyers/users and increases in global productivity have been filled from 1980 to 2000 . As many in the know will say.. "what can be done has been done!". We are very well into the mature phase of this industry. Every industry has this, ship building, rail roads, etc etc. This is done! The tech for todays consumers are mear toys to play with. They are the end products, of the technology and communication boom for the past 20-30 years. You wanna create a slick web page filled with adversting or spanky DVR, MP3 player for your entertainment consumption.. go right at it, the past 20-30 has made it possible, but they are not the miracle products I have been fortunate to have seen.

Our greatest needs today and hopefully will be fullfilled by 2040 is getting our nation off mid-eastern oil consumption. Make something that will power a car long enough or provide juice to power a city at economical costs, then your talking about creating wealth for yourself and others. That used to be SV back in the day, but no more.

Energy is our greatest need today. The future as I see it is nuclear power.

Troy, specifically in the long-term future I see nuclear power not as fission but as fusion. We can't keep building fission reactors that create isotopes that are radioactive and highly toxic that last for thousands of years that we must store somewhere without consequence. If you think that the current disaster in the Gulf of Mexico is bad, it pales in comparison to a true nuclear accident whether at the reactor or at a waste storage site.

We have to find a way of producing energy that doesn't kill us in the process. Our addiction to fossil fuels is going to destroy the ecosystem of the Gulf, make no mistake about it. And now that the oil slick has gotten into the Gulf Stream it may end up affecting communities on the East Coast. So we may see the destruction reach beyond the Gulf.

If we go nuclear, we must make absolutely certain that it's 100% safe. Otherwise we are going to be fooling ourselves again like we do with fossil fuels currently.

Specifically it looks like cold fusion is our best bet:

http://www.coldfusionenergyscience.com/

simchaland says

Troy, specifically in the long-term future I see nuclear power not as fission but as fusion. We can’t keep building fission reactors that create isotopes that are radioactive and highly toxic that last for thousands of years that we must store somewhere without consequence. If you think that the current disaster in the Gulf of Mexico is bad, it pales in comparison to a true nuclear accident whether at the reactor or at a waste storage site.

Nope, the spent rods are recycled and radioactive isotopes are removed, lasting a few years and are harmless, not thousands of years. This isnt the reactors of the past. We come a long way and need to go further. I would skip the cold fusion nonsense and get busy with it. The world is already doing this, why are we falling behind?

Yeah, right. Cold fusion isn't nonsense. It's reality. It's energy that will last for billions of years that doesn't pollute at all. And there's no danger of nuclear meltdown.

And there is no process to recycle waste completely. There is ALWAYS waste from fusion no matter how much you recycle. And it is highly toxic for THOUSANDS of years.

We should stop the nonsense of producing energy in ways that will kill us. Our use of fossil fuels is slowly (or not so slowly) killing us.

Fission reactors have a high potential for killing us through failure and the spent fuel and waste products will continue to pose a hazard for thousands of years. Fission is a wonderful way to generate energy until cold fusion is finally developed though. It's got a better safety record than fossil fuels for now.

And we can keep making them even more safe until we get cold fusion:

http://www.i-sis.org.uk/safeNuclearDecommissioning.php

Cold fusion is the energy of the future. It's safe and completely clean. And the energy produced is practically limitless.

I think the "silence" of some contributors to this forum, who are NOT commenting on this speaks volumes.

Junkmail,

What message do you think the "silence" of the forum means? I'm curious.

Just another buying opportunity ultimately.
Take your EWT and toss it ...Trend Lines and Fibonacci #'s are all you need.
Trends down so sell rallies it's really that simple but not that easy.

Hey V ! I told you guys Obama was Chicago's finest :))

I think this bodes poorly for house prices here in Ashland, Oregon. With fear, there will be less liquidity in housing, I'm afraid.

Ashland cannot maintain the house prices, based on "average wages" or "rental return." I am thinking about selling my house, before things drop any further. Ashland, and maybe "coastal US" has always had higher prices, maybe since the 60's than compared to the midwest. Why and how is it sustained over time?

The place is hopping now, apparently bouyed by fed stimulus, retirement $, and "leaving the city" monetary lubrications. Where will this Ashland market be in a year?

I am thinking about selling out my house before I lose another 100k from the top of the market, here in Ashland. Any suggestions or ideas on more research for Ashland housing market prices out there? Looking at the price curves up and down in last ten years, I believe housing here parallels the LA or San Fran graphs.

simchaland says

Yeah, right. Cold fusion isn’t nonsense. It’s reality. It’s energy that will last for billions of years that doesn’t pollute at all. And there’s no danger of nuclear meltdown.

Kirk: Thank you Mr. Scott, please check the Delitium chamber and the Matter-Anti Matter converter,
and throw in a quart of oil. I will be pushing warp 9 on our next mission out to the Romulan neutral zone.

junkmail says

I think the “silence” of some contributors to this forum, who are NOT commenting on this speaks volumes.

Comment about what? This thread is all over the map.

Vicente, yeah, this thread has become like a drunken sailor, really. I meant it more to be a discussion of the evolving ups and downs of the stock market but it seems to have turned into a potpourri. I've kind of contributed to the diffuse nature of the discourse on here. Oops. Oh well...

If we go nuclear, we must make absolutely certain that it’s 100% safe. Otherwise we are going to be fooling ourselves again like we do with fossil fuels currently.

Sadly, the inextricable human fallibility factor means that notions of 100% safety are a pipe dream. If you can take man out of the equation, however...

Specifically it looks like cold fusion is our best bet:

Cold fusion/isomer triggering remains fringe science at best, pathological science at worst. Just for starters, it completely violates known laws of physics. Both the DOE and DOD have wasted millions of dollars farting around with this already.

You know what's disappointing about this oil spill?

Lacks a soused captain we can pin it all on.

@simchaland
thomas is correct with nuclear reactors. The "dirty: ones that were built in the US, do create a mess, but most of the world doesn't use these. The way the new reactors work is that as they create more energy the spin faster, when they get up to a certain speed centrifugal forces pull apart the reaction, so it can't run wild. Fusion has been worked on for so long, with no usable output, we have at least 20 more years of work to go before we can get anything net positive out of them. Nuclear is a good way to go, but in reality we need multiple sources. Most nuclear waste from modern nuclear reactors isn't very dirty AND there isn't much of it. Old US nuclear reactors create masses of VERY long living materials. Putting nuclear waste in a mountain for even thousands of years is fine. Even if there is a massive earthquake and it all ends up topside, nothing will happen, it'll be a mess but we'll clean it up. It isn't going to spontaneously create a nuclear explosion.

The answer isn't one source, nuclear. It's multiple sources, wind, solar, tidal, hydro electric. We have such insane energy needs now that we have to grow out several avenues. Secondly, we need to learn to use energy better. Better insulation, not running computers all night long, better data centers (they're like 5% of power now?!), and lighter smaller cars.

Until we can SEE how much energy we're wasting, we aren't likely to do much though as consumers. Increasing prices + smart monitors will help here I think. People will begin to actually understand how much little things effect their energy consumption.

@thomas
Computers are pretty much mature now, I agree there. We're just starting to really integrate computers into our lives. Computers will push the next big thing, biotech. Now that the computers are fast enough, and our manufacturing skills for great scientific equipment have really expanded, we can expect to see some fantastic advancements in this area. Just look at the genome projects, how slow they were previously and how quickly they can process the data now.

thunderlips11 says

A GREAT week for Bears

Well, we ended the week on a bullish note. It's Dow up 125.38.

I don't enjoy being a bear on the stock market. I do like living in reality though. And I enjoy being a bear in other aspects of my life. ;-)

Vicente says

You know what’s disappointing about this oil spill?
Lacks a soused captain we can pin it all on.

Maybe someone can create one - blame the whole thing on an alcohol-infused poker game in the control room. "When the legend becomes fact, print the legend." (from The Man Who Shot Liberty Valance)

Biotech is a dead end. The difference between the two industries are too vast.
HT enjoyed fat corporate budgets which you will not find in biotech. They dont have the beauracracy and long periods of R&D,
which only drains working capital. You can make a wonder drug to cure all Aids, but who will buy/pay for it.

thunderlips11 says

1. Hiring IT guys to stock shelves is a mark of an inefficient, wasteful economy, not an efficient, vibrant one.

Check

2. There are nowhere near enough jobs, even if people lowered their standards.

Check

2b. All that would happen is that the unskilled would be totally S-out-of-luck as they would be forced to compete with college grads for gas-pumping positions.

Check - Yes, I see this happening right now. I work with 18-25 year olds. Almost none of them can find jobs, not even entry level burger flipping ones. Why? Because they are taken already by state workers on furlough and former "middle managers" and other paper pushers and IT people.

2c. And Wages would take a monster nose-dive. Employers would be able to force cuts of 10% and beyond to petrified employees, resulting in a fresh, fear-driven wave of consumer spending cutbacks.

Hold onto your hats. This is what the aristocracy has in store for us next if workers don't unite.

3. But Many employers will not consider people who they believe are ‘overqualified’, as the article below illustrates:

Yes, isn't that ironic?

“Being a college graduate with work experience won’t get you a job at the Dog Kennel” - 260 people, including experienced teachers, middle aged accountants, etc apply for one part time $8.55/hr dog poop-cleaning job in Washington State:
http://seattletimes.nwsource.com/html/dannywestneat/2011421840_danny24.html

Sad, isn't it? And this is happening more and more. Does anyone see a recovery happening right now?

This is all Bush's fault.

thomas.wong1986 says

Wanna buy a Netbook for $200 dollars!

You're conflating technology improvements with inflation. That is incorrect. The FED does the same thing, they call it Hedonics though. You should bear in mind that netbook won't be very good compared to a decent (ie. ~$700) notebook...

Prices on many things like food and housing have been heavily subsidized over the years. Its been obvious with housing, but less so with food, but it has happened all the same. Corn, rice, meat, and soybeans have all been heavily subsidized over the years. They've also gone to great lengths at the same time to reduce costs by cutting quality. You can search Youtube for videos of how most farm raised pigs, cattle, and chicken are treated if you don't believe me, its pretty ugly.

You guys are all forgetting inflation is easy to do. If gov wants to they'll just flat out mail people the money or do a tax credit. Both have been used several times pver the last few years, by Bush and Obama. I still doubt that they're going to raise wages though. If anything I'm seeing wages decrease right now. High inflation would be absolutely brutal right now on the middle class and poor Americans, but I think that is what we're going to get instead of deflation since the gov. hates it so much and views inflation as the lesser evil.

tts says

You’re conflating technology improvements with inflation.

No! what im talking about is market competition. Something thats been going on since 1985.
You will not find many local tech companies that can sustain market pricing "power". Once your
competition drops their prices, all other players follow. We seen this multiple times from Semis,
Semi Equipment, SW, Servers and the rest. That is why we seen prices drop from $5000 to less than $500. When vendors negotiate prices it usually time and time again see 20-30% discounts. Its difficult to establish product prices in tech companies. That is why Silicon Valley and many tech players in other regions are deflationary.