Thursday, August 26, 2010

Here We Are, Now What?

GDP equals consumer spending plus investment plus government spending plus the difference between exports and imports.  For the past two full years, our economic saviors have dunked the markets in "money" not to repair the structural issues of consolidated risk, financial fraud, and an unsustainable economic model, but rather, to maintain some semblance of confidence in this rapidly fraying system.

Now, as before, the problem remains that there's no plan following Operation Market 'Roid Rage for which to transform our economy into something stable.  Sure Obama likes to jump in front of crowds and talk about how important it is to focus on exporting, but does policy even lay the ground work to begin reasonable corporate effort to repatriate production?

If I'm being honest, Cuban was right, the market is for suckers.  The market is for suckers and assholes, and the financial sector is a zero value added enterprise.  For some reason, our culture has come to accept that we absolutely must put our future into stocks, bonds, and mutual funds, instead of ourselves.  To all those deriding housing as an investment consider that over the past 10 years the market is more or less even.  Consider that if houses cost about the same as 10 years ago, the savings of compounding mortgage interest ( ~8% on a 30 year fixed back in 2000) actually pays the homeowner by not being a future expense.  Add to that that the homeowner would not have to worry about paying a mortgage during retirement, the preponderance of most Americans' core monthly expense.

If anything has been learned, I think we're going to see the leverage coming out of this market as the kick of the can was meant for time-released stimulus and taxation, more commonly known as an inflationary transfer of wealth to those who survived recent history, from those so deeply indoctrinated by fear that they don't know what to do.  (They do know where the unemployment office is, though.)  Until there is a plan, expect disappointment, and receive it, because this leaderless, spineless, partisan, nouveau-Aristocracy cannot be relied upon to think philosophically and with regard for complex payoff, rather than insta-profit.