Post-Subprime Economy = Subpar Growth?

[buster]

http://www.bloomberg.com/apps/news?pid=20601068&sid=aVZRne8kZBGI&refer=economy


Quote:
May 19 (Bloomberg) -- A normal U.S. economy is likely to look a lot different, and worse, after the credit crisis is over and financial markets settle down.

Companies will continue to struggle to raise cash for expansion and innovation as investors and lenders remain focused on conserving capital. Workers, too, may have less flexibility to go after new opportunities, because many will be stuck where they are -- in homes worth less than the balances on their mortgages.

``Once you've made terrible, overly optimistic errors, that paralyzes you for some time,'' says economist Paul Samuelson, a Nobel laureate.

 

[Pablo]

As it should be, no?

 

[buster]

Originally Posted By: Pablo
As it should be, no?


Yeah I think so.

 

[Gary Allan]

Another Captain Obvious that didn't see this ahead of time.. providing commentary to fill in the post collapse void.


Quote:
says economist Paul Samuelson, a Nobel laureate.


Is this who they're quoting? He's just shy of 100 years old.

 

[buster]

 

[oilyriser]

All you need now are price caps on gasoline, and subsidized heating oil for the poor, next season...

 

[Gary Allan]

Originally Posted By: oilyriser
All you need now are price caps on gasoline, and subsidized heating oil for the poor, next season...


Yes. That should assure a plentiful supply. No waiting in line ..no lottery ..no allotment..no rationing.

 

[VeeDubb]

For a look into the future, just look at Japan over the last decade. We will also likely have a quasi-nationalized banking system, hopefully, Nordic style.

I predict a long secular bear market once the current "bull" market is officially over.

P.S. I had a sneaking suspicion that the Fed is currently trying to create massive inflation because of our collective debtor status. Well, it looks like it was confirmed by this:

"A speech by Bernanke in May 31, 2003: Some Thought on Monetary Policy in Japan: “Rather, I think the BOJ should consider a policy of reflation before re-stabilizing at a low inflation rate primarily because of the economic benefits of such a policy. One benefit of reflation would be to ease some of the intense pressure on debtors and on the financial system more generally. Since the early 1990s, borrowers in Japan have repeatedly found themselves squeezed by disinflation or deflation, which has required them to pay their debts in yen of greater value than they had expected. Borrower distress has affected the functioning of the whole economy, for example by weakening the banking system and depressing investment spending. Of course, declining asset values and the structural problems of Japanese firms have contributed greatly to debtors' problems as well, but reflation would, nevertheless, provide some relief. A period of reflation would also likely provide a boost to profits and help to break the deflationary psychology among the public, which would be positive factors for asset prices as well. Reflation--that is, a period of inflation above the long-run preferred rate in order to restore the earlier price level--proved highly beneficial following the deflations of the 1930s in both Japan and the United States. Finance Minister Korekiyo Takahashi brilliantly rescued Japan from the Great Depression through reflationary policies in the early 1930s, while President Franklin D. Roosevelt's reflationary monetary and banking policies did the same for the United States in 1933 and subsequent years. In both cases, the turnaround was amazingly rapid. In the United States, for example, prices fell at a 10.3 percent rate in 1932 but rose 0.8 percent in 1933 and more briskly thereafter. Moreover, during the year that followed Roosevelt's inauguration in March 1933, the U.S. stock market rallied by 77 percent.”

 

[Tempest]

Originally Posted By: Gary Allan
Originally Posted By: oilyriser
All you need now are price caps on gasoline, and subsidized heating oil for the poor, next season...


Yes. That should assure a plentiful supply. No waiting in line ..no lottery ..no allotment..no rationing.


I hope you are joking.

 

[Gary Allan]

I thought that the redundancy would surely indicate my mocking of the notion. I think oily really didn't buy it either when he posted it.

 

[oilyriser]

The Human Development Report by the World Bank, in year 2000, has an interesting graph on one of the pages, showing the natural progression of nations. Thanks goes to the late Bill Cooper for pointing that one out.