1. With the new record lows on market interest rates for mortgages, there is no possible way this is the low in the housing market. Think about it. Housing bubble was in fact created by absurdly low, artificially low rates. He we are 2 years after the peak, and houses sales are barely budging, let alone working any semblance of a draw down in inventory. Until prices drop substantially lower on this real estate bubble, there is no chance we see a bottom. Add to that the massive numbers of foreclosures yet to come, and you have a recipe for certain disaster for the banks, the fed, and anyone who touches this toxic waste for the next decade.
2. The US dollar is fundamentally broken as a reserve currency. It held out this long bc so many people have so many trillions of them, development of alternatives will take some time. It could maintain its status IF:
a) the government seriously worked to contain spending, and brought down debt. We know for a fact this is not happening, nor will it likley to occur in the foreseable future.
the fed raises rates. this wont happen as long as bernanke is in office, and the fed is so closely tied to the government and GS, and the rest of the WS financial sphere. The words "independent" and "Fed" do not belong in the same sentence.
c) serious efforts were placed by government and private industry to re invest in our manufacturing base.
3. The move up in the markets will continue, as long as there is no constraint on the liquidity pumps of not only our banks, but central banks across the world. The rise in stocks has nothing to do with the fundemental growth prospects for companies. Fact is the fed is going to continue to "print money" do QE, or whatever fraudelent name you want to call it. The fed has no choice in this.
4. Any bank lending to businesses in this environment with this backdrop is a total idiot. You can't blame banks for not lending. Nothing is being done to change the fundamental growth prospects for the companies they are being approached by. Our government isn't doing anything, states aren't doing anything, and the companies themselves are frozen like deer in highlights by serious uncertainities not the least of which is a) Cap and Trade,
healthcare reform, c) un fettered free reign by the financial markets with derivatives, d) no serious oversight or punishment from the SEC, e) totally outdated free trade laws, f) resurgence of unions, g) a work force that is highly uneducated to meet the demands of needs for growth in new technology for the 21st century, h) a school system that is fundementally flawed at the k-12 and graduate levels, g) college costs that are so exhorbitant, no student in their right mind should even consider going unless they know for a fact the degree they pursue will allow them to pay off the debt in less than 5 years after graduating.
5. Buffet remains invested in the OLD economy, because he knows there will likely not be a NEW economy until many items in 4) above are addressed. He is wily like a fox though, and pretends america is this great country to overcome the challenges it faces, because to say what he knows to be the truth would be financially reckless for him and his shareholders.
6. Oil will play a major role in deciding the winners and losers of the next two decades, as simply there is no other alternative at present, nor the infrastructure to support another serious alternative, NOR most importantly the capital to deploy (at least by this country) to expand the infrastructure sufficiently to develop a true alternative. This country is stuck. We can't get out of oil, until we let things fail, until we let debts be defaulted upon, or less probably paid off, and until millions more become unemployed before we hit a sustainable bottom where a new foundation for capital can be formed, and a new financial system that can support the infrastructure changes needed to keep us from falling back to the 19th century or earlier. Go around the globe and you can see where capital is being deployed and certainly it is NOT HERE in the US, NOR FOR here in the US. China is deploying capital for its OWN needs and its not here. Same thing with India, Russia, and many other developing countries.
7. Agriculture could be a mainstay and a partial way out of our problems but even that is severely inhibited by oil, depleting water resources, and again the massive amounts of debt we hold.
So if you really believe that somehow we have seen the bottom, somehow the worst has passed, I challenge you to ask yourself have we really suffered much pain, and changed our habits enough to rid ourselves of the debt, and made changes in the financial system, that address what got us here, and even gotten seriously mad enough to make the needed changes in our government. Maybe Im missing something, but Ive seen little shreds of evidence of much change from before this crisis started. I have seen a lot of burying of massive debt and toxic loss problems in some charade called the federal reserve, and 12 new trillion of dollars allocated, spent, burnt with no trickle down into the people, businesses, or social fabric that makes up this country, and little to show for it except some half backed fabricated numbers that say we ONLY had 11,000 job losses in November and we are ONLY at 10% unemployment.
