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4 Possible Market Scenarios

Perhaps, the focus should be more on what happens to the treasury going forward. If the world loses its appetite for treasuries, treasuries go down and interest rates go up. Considering our current situation, higher interest rates might put a cap on growth to say the least. In turn that could be the prescription to squeeze out inflationary pressures. My guess is the government bond market will lead the Fed by the nose. Unfortunately, this will keep our economy in the crapper.

Relax, Obama's Socialist Agenda Is Capital Friendly

I can see Obamans carving out some form of universal coverage. They are likely already facing sticker shock and will likely introduce any number of expense cutting measures in an attempt to make the overall cost palatable. But one only needs to study the life of government programs to better understand why many are opposed. Every government program is forever changed and manipulated to expand features and benefits. This is an eternal given. We are about to embark on some type of universal coverage that will initially appear wildly expensive but 5 years from now we will look back and wonder how it grew so much from those good ole days of 2009. This is a plan that will grow exponentially larger every couple of years costing business more than it was ever marketed to save leading us down the road to global competitiveness issues which will result in a natural unemployment rate of 9 or 10% just as our Euro-models, France and Germany.

How to Preserve Wealth in a Socialist Economy

I'm not so sure about Canada as some type of safe-haven from taxes. Canada is pretty socialized already. Taxes are already high and will be going higher. If the U.S. goes full bore socialist, Canada will be lock-step with the U.S. Socialism has plenty of flaws but socialists disregard these and continue to look forward to expanding their philosophy. U.S. socialism would provide more guard from socialist critics in other countries, thus unleashing more of this failed economic model. If one really sought shelter from taxes, they might give up their citizenship for the Bahamas.

Don’t Panic: Real-time Data Points to Stabilization

I think the market has basically discounted most of the bad news ahead. We will likely see a last round of foreclosures going into Summer and then more moderation in the numbers. We bottomed intraday Nov 21. We haven't broken that intraday low and I think we likely won't. We aren't at bottom but are in the bottoming phase meaning trading ranges as low as 7400 and upwards of 9500. Last of all, the next bull market will start before unemployment has peaked. Unemployment is a lagging indicator and typically accelerates at the end before a turn. Fortunately, this keeps some money out of the market presenting opportunities for those not willing to emphasize lagging indicators.

Risks to U.S. AAA Rating Have Grown

So if the U.S. isn't worthy of a AAA rating, who is? Which country is ready to take the lead in the world economy? China?, Germany? Japan?

U.S. Records Huge Current Account Deficit

"Had the Administration and the Congress acted responsibly to reduce the deficit, American workers would be much better off, tax revenues would be much larger, and the federal deficit could be eliminated without cutting spending."

No proposal made here, but one might reason a domestic energy only policy, or trade barriers to the U.S. market for other countries, or even pushing harder for a revaluation of the Yuan.
Taken one at a time, a domestic energy only policy sounds great but environmentalist have blocked this from happening. If we had been building nuclear reactors, and allowed greater access to oil & gas drilling, and even the conversion of coal to natural gas, we might have already reached this goal, but no. Environmentalists might counter now and say they are behind solar and wind which would reduce our dependence on foreign oil, but electric cars are far from a competitive reality and solar and wind are still very inefficient and would require hundreds of billions of new infrastructure to hook to the grid.

Trade barriers applied to foreign companies is really a stupid idea. We raise tariffs or apply maximum quotas, and other countries will only retaliate. This makes for less trade all around and a lower standard of living for all. What we need to do is become far more reliant on technological advances with an eye on becoming even more productive. Unfortunately, our educational system isn't set up to create anything but worker bees. Very few engineers will come from the U.S. system unless we greatly import brain power from other nations. These would be young students that we can offer a top notch university education but who will relocate permanently to live out their working lives in the states. We've already incorporated this strategy by default.

A revaluation of the yuan would affect our trade imbalance with China, but other emerging nations are ready to fill in where China drops off. It may affect our trade imbalance in the short term but longer term it will only move the trade imbalance to other nations.

We Can't 'Spend and Save' Our Way Out of This Recession

I suppose it is assumed that with all the deleveraging occurring that their will be some inflection point when Americans revert to their old ways of shop, shop, shop. I would be one to agree that a true paradigm change is not generally very likely. We are a very materialistic society and a value change won't come easily. But we may be staring at the components to a change. Our government has been bailing out our financial system with mega billions as we await the next two rounds of bailout---the auto industry which should run over $100 billion within the next year alone and homeowners which will run into hundreds of billions at least. Additionally, the Obama administration and Congress are already designing a trillion dollar stimulus package that will be spread on pet projects throughout the land. What kind of shape will the economy be in after all this money is spent? Hard to say, but one thing is certain. The interest on the deficit will likely crowd out everything else for decades to come. We will need to cut back on every other program or we will lose any chance of a future in the developed world now.

Obamamania vs. Reality Bites: Tensions Establish Historic Short Window

Plenty of good points made about the FDR years, but don't attempt to persuade people who lived during those years. FDR was seen as a rock to hold onto as the waves of depression and WWII rolled over them. I sense that will be the same with this generation. Additionally they will be influenced by a powerful media that has already convinced the masses that Obama's America will be paved with gold. I suppose those that sound the warnings over the next few years will be viewed as ingrates & partisan deadbeats. I'm trying to add up what all this stimulus and infrastructure spending will add to the economy while adding greatly to our overall debt picture. Additionally, what are we getting when one remembers that the infrastructure jobs aren't permanent jobs. They will add and later subtract jobs from the economy. I suppose the hope is that by filling the pockets of employees even for a temporary period of time will multiply in the economy and create more jobs. Would it be fair to assume that when these temporary jobs disappear, they will bring down other jobs as well? Is this the right use of our resources?