LCACM

Elliot Wave: The Dollar Is Set for a Major Rally

The Chinese keeping pumping out shoddy goods but US consumers purchase them because the goods are cheap, and alternatives have long disappeard. The US has the ability to pump out massive amounts of dollars and Chinese have no choice. but to accept them in exchange for their shoddy goods. Though each side complains about the other's cheating in this game, probably each side is convinced that it is the only game in town for them.

Forget BRIC: Your Portfolio Needs TICK

Investments are about the future and not about the present or the past. Of the 4 TICK Countries, Taiwan, Israel and Korea have dark geopolitical clouds and not much in terms of natural resources. Chile is the exception in that they don't have much geopolitical risk and the country has sizable natural resources.
Of the 4 BRICK countries, all four have significant natural resources and large internal markets. They do have current poliical risks, but not insurmounatble in comparison to their size/potential.

Trade Tensions Surfacing Between Emerging Markets of the Global South

Surprisingly the Indian government has done little to stem the dumping of Chinese goods on the Indian market. This is destroying numerous small scale industries in India and is likely to have a negative impact on Indian employment and economic growth.

The Socialist Calculation Problem and Regulation of Financial Markets

The author is writing based entirely on ideology that believes that it is impossible for the Governmeent to do anything properly. This thinking entirely ignores facts, and has directly contributed to financial deregulation and meltdown. As an example, Glass Steagall act had provided a firewall that had successfully prevented the greed of bankers from bringing down institutions where they worked. Financial lobbyist undid Glass Steagall and sure enough a financial meltdown follows. The author is critical of baby steps that the EC is trying to take towards the goal of accountability at financial firms. Baby steps always seem awkward, even those of a future ballerina.

Nasdaq Sale: Why Would Schapiro and FINRA Lie?

The author has done a superb job, exposing a very important issue. Looking forward to the next post.

U.S. Public Assault on Renminbi Peg Likely to Backfire

Since US is a trade deficit country, it cannot lose anything if Protectionism takes hold. On the contrary it will bring back jobs to the US. Not sure why Protecting jobs is bad when every nation is spending billions on Defense. In today's world, if a nation does not protect it's jobs and manufacturing base it will lack the wherewithal to Defend itself. So Protectionism is a strong component of national Defense.

American Austerity Is About to Begin

The author and several of the commentators seem to indicate that US citizens must suffer great economic hardship to placate the Free Market Deity. To change the current economic course, we need to first understand what brought us to the juncture of the economic meltdown.
US and other World economies have been sucked into the economic black-hole, first promised by Russia's Kruschev (en.wikipedia.org/wiki/...) in his "We will bury you" speech. It appears that the Communist threat has instead been made good by today's Communist China, using Free Trade as their weapon of choice. Corporate CEOs have been willing collaborators of the Communist regime, investing billions in China to shift manufacturing plants there.
Even if Americans started to save, CEOs would figure out a way to plough those savings into China, unless the US government takes steps to prevent that.

Opportunity in the Brazilian Real and Chinese Renminbi

The implication of the article is that China and Brazil seem to have very succesful economic models, and that Western Europe and US have economies that are slowly disintegrating. Is it time then to revisit our assumptions as to the types of political and economic structures that produce the most prosperity?

How Can We Get the Economy Back on Track?

The analysis by the author is excellent. The challenge is how to get the economists who dictate the national policy to upgrade their thinking. Conventional economic thinking has the goal of maximizing production subject to the resource supply constraints, and totally ignores the fact that due to the industrial / scientific revolutions the amount of goods produced, today far exceeds what the markets can absorb. The goal of new economic thinking should be maximization of jobs rather than production of goods. The following concrete steps can help to achieve to achieve this goal a) require all countries to institute a minimum wage structure to absorb surplus goods being produced. Imagine the surge in demand that would be produced if China/India were to institute a reasonable minimum wage. b) Institute the Export Certificates regimen suggested by none other than the legendary Warren Buffet,to slowly balance trade. Balanced trade is a must to ensure stability of demand. Currently it appears that overproduction by China is creating an economic black hole.

Wasted Olympic Dollars: What About Real Job Creation?

The author is absolutely correct in stating that the US government priority should be job creation and not Olympic games. Considering the huge levels of US Trade and Budget deficits, it is not clear why US was competing for a chance to spend $30 Billion on hosting the Olympics. Rio probably needs the Olympics to showcase their city capabilities, but Olympics would not add anything to the reputation of Chicago.

Will This Economy Ever Create Job Growth?

The US economy is like an anemic patient whose vitality is being sucked out by the Chinese Dragon taking advantage of US Free Market ideology. However, Short sellers can get squeezed when Government provides Blood transfusions in the form of easy credit and quantitative easing, to prevent the patient from collapsing. Long term investors have to worry that the giant hissing sound of jobs leaving the US that Ross Perot alluded to, is being abated by politicians of both parties in exchange for campaign contributions. It is possible though not probable that the slumbering millions who have lost their jobs, wake up and demand corrective action from their elected representatives, further clouding the investor’s horizon.

Is India a Benchmark Bet on the Global Economy?

India probably cannot be a benchmark for the Global Economy as its socio-economic makeup is markedly different from Europe, Africa or Middle-East. In India joint families and extended families are the norm, resulting in a family having several bread winners who pool their resources.. A job loss by one or two family members probably requires belt tightening but is not economically devastating as in the West where a family depends on one or two breadwinners. As a result the loss of consumer confidence due to the financial Meltdown is fairly low in rural India, compared to other economies. Also as the Indian laws do not allow companies to hire and fire to satisfy their whims, the job situation is not so dire. This has had the positive impact of improving consumer confidence and the resulting consumer demand. It is interesting that countries that follow a mixed economic model (India,China) are performing better than countries following either a purely socialistic or purely capitalistic ideology.

Julian Robertson Is Warning Us

If the Chinese stop buying US treasuries, it will be good for the US economic health. Needless to say that the US economy will go through a painfull wihdrawal period, but the US will emerge a stronger economy after it gives up on it's addiction. As a result of giving up the addiction of US government selling Treasuries to the Chinese government, US companies could be selling US made products to Chinese consumers.

G20 Urges 'Balanced Global Demand'; China Says 'No'

The US voters need to wake up to perils that lie ahead caused by the huge trade deficits. A number of candidates in the Presidential primaries brought up these trade imbalance issues but did not get anywhere in the primaries. The voters preferred to vote for the media annointed Obama with help from super rich campaign donors. Now Obama has to worry about getting reelected and campaign funds. At this juncture it is safer for him to listen to the oligarchs and ignore Chinese trade malpractices, as he will be relying on the oligarchs to provide him with the necessary re-election funds. In return he will have to take orders from the oligarchs who profiteer by importing Chinese goods to take advantage of the US market.

Financial Meltdown: China Blames West, West Blames China

In this debate each side is correctly depicting their own side of the two sided Coin. Each side has contributed to this mammoth problem. Huge trade imbalances due to the Chinese policies caused the US economy to tank due to US job losses. The correct way to revive the US economy would have been for the US Government to take quick measures to balance trade, instead, the US Fed tried reviving the economy using cheap credit coupled with lax regulations, thereby fuelling the internet bubble and than the housing bubble. Corrective increases in US interest rates were prevented by Chinese purchases of US Treasuries, artificially keeping US interest rates low. The Chinese government has done this deliberately to prevent Chinese workers from consuming any sizable part of the goods they were producing. This problem can now be solved by both sides acting in a coordinated and responsible fashion.