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Friday, December 25 2009 |
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- Even the most optimistic scenarios don't play well for China, Nouriel Roubini says. "The world where the U.S. was the consumer of first and last resort... and where China was the producer of first and last resort... is changing."
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This news story has 12 comments:
The US consumer is the greatest consumer in the world. Our appetite for consumption will remain at the healthy levels seen in the middle of the decade. And it will be supported by growing credit, which will continue to be supplied (and in ever-growing quantities) by the Chinese and others. (The recent report showing declining consumer credit is a lagging indicator.)
US bonds are rated Triple-A, our economy is headed for an "I"-shaped recovery, and US deficit and debt levels are forecasted by the administration to be halved in less than four years. Further, the stock market has proven that investors are long on America. Why in the world would China or anyone else think twice about loaning us as much as we want?
Roubini and his terrorist-loving confederates should move to Iran.
Unemployment is considered a lagging indicator too, but we wont see a peak until end of 2010. And we are going to see another wave of millions of foreclosures in May. Consumer confidence is at an all time low, ever in history.
So, nothing here would suggest any type of hope in this economy whatsoever. The only reason China still buying out debt, is because they know if they stop, everybody will be out of money.
Q1 2010 is when the peak is suppose to be. Count in the commercial defaults that are coming, and will make the current foreclosure crisis look like child's play, and the lack of credit available and that spells a recipe for disaster. I don't know where you are seeing growing credit, but isn't in the U.S. or anywhere else on planet Earth. Glad you're optimistic, but you need to start getting back to reality.
I would say 5% GDP growth is rather optimistic.
Of course this all anecdotal evidence....hard to know in a secretive society.
Joshua, the dollar is rising because everyone recognizes it as the strongest, most stable currency in the world -- a currency tied to a fiscally responsible government and a thrifty, productive people. Other currencies have been devalued because they are weak in comparison to the dollar and are tied to interventionist governments and lazy, badly educated peoples.
As for trillions in debt, the last 30 years have proven that debt and deficits don't matter. We can keep borrowing in order to finance our debt, which in turn supports consumption. Even the latest "crisis" hasn't changed that. Witness the value of the dollar even after crisis, stimulus plans and quant easing. In fact, as the US has taken on more debt, it's cost of debt has dramatically delined. Witness the close-to-zero yield on T-Bills.
Unemployment and consumer confidence are lagging indicators.
Mozatta, commercial defaults are still very low as a percentage of loans. The long-anticipated CRE implosion is obviously not happening. Even if it ever did, the gov't could step in with a CRE PPIP to limit any pain. It will be as if it never happened, just like the alleged "problem" with banks' legacy assets, which is being resolved by the PPIP and the elimination of mark-to-market.
Fatcat, plant closures, urban exodus and shipping indices are all lagging indicators.
Why won't the pessimists finally capitulate and admit that the alleged Great Recession is nothing more than a crisis of confidence that is now abating?
But we should think that we will make everything that we need, or that they will have zero production.
Look at the auto production 2-5 forecast : some think it is will 9m in 2010, some think it will be 11m in 2011... So somewhere in the at range of volume AND TIME ( ie we could have 10m in 2010 not necessarily 2011)... So for now everyone is ESTIMATING.
For now, Roubini is using his fame to make judgement call that are not accurate. He should SHUT UP and go drink more wine to celebrate that he made a dire call once, while we fix what is wrong..
The only thing that could fundementally change Americans greed and need for more stuff would be the second coming of Jesus Christ.
Consumer confidence reached all time low levels last fall when it looked like Wall Street, the banking system, and the economy were going to collapse. People held their breaths and their wallets, hoarding their own little piles of dough just in case.
More and more it looks like the worst case scenerio isnt going to happen, people are breathing a little easier and their starting to buy more stuff. Retaillers who cater to young people are doing well because young people have learned from their parents and advertisors that having the latest and greatest and sexiest gizmo is the most important thing in life.
Give an American a half arsed stable job, a rising credit limit, and in a few years he'll be spending at the same levels as 2007.
> Give an American a half arsed stable job, a rising credit limit,
> and in a few years he'll be spending at the same levels as 2007.
And in a few more years he'll be bankrupt again. Financial engineering can do wonderful things for prosperous firms and strong individuals, but nothing can allow individuals to consume more than they produce over an extended period of time. Not lower interest rates, not looser standards, not securitisation nor derivatives. Nothing. It is fundamentally impossible. Americans will produce more or consume less, whether they like it or not.
On Apr 10 04:24 PM Smegma wrote:
> There you go again, Comrade Roubini.
>
> The US consumer is the greatest consumer in the world. Our appetite
> for consumption will remain at the healthy levels seen in the middle
> of the decade. And it will be supported by growing credit, which
> will continue to be supplied (and in ever-growing quantities) by
> the Chinese and others. (The recent report showing declining consumer
> credit is a lagging indicator.)
>
> US bonds are rated Triple-A, our economy is headed for an "I"-shaped
> recovery, and US deficit and debt levels are forecasted by the administration
> to be halved in less than four years. Further, the stock market has
> proven that investors are long on America. Why in the world would
> China or anyone else think twice about loaning us as much as we want?
>
>
> Roubini and his terrorist-loving confederates should move to Iran.
> Give an American a half arsed stable job, a rising credit limit,
> and in a few years he'll be spending at the same levels as 2007.
I doubt it. Household debt is at about 100% of GDP. The average household has about $8,000 in credit card debt. How can the American consumer go back to 2007 levels, particularly with banks having gotten spanked after making such foolish lending decisions?