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[nimblebear]

The new 2012 Camry was intro'd today to existing owners, and I have to say I was impressed by their hybrid Camry. Toyota and Japan continues to be a leader in a changing world economy. So to start my "things that make sense" post here are a few points: 1. Car gets 43 mpg city. That's more than 2.5x the 16 mpg my wife's van averages, and nearly 80% of her miles are city and short. Why do we still own a van ? More American's are likely to continue to "downsize" or rather "rightsize" their homes, cars, lifestyles, habits, etc. Their hybrid is actually -$1100 less than this years, w starting price of around $25k. Not bad. Many other competitors are improving fuel mileage, quality, technology gizmo's too. With being able to buy on the internet, I can have many large things I would otherwise haul in a van from the store, delivered to my doorstep. This trend will continue for many people here in the US. 2. Leads me to this one: my FF is that while the stock indexes may go into a bear market, Americans will continue to embrace new technology, and potentially in significant ways that help them to do more while learning to live on far less income. Oil and fuel prices may go up, but because of the way work and careers are changing, even personal travel habits, people will continue to drive far fewer miles than they have been. Coupled with boomers retiring en masse, cars will not only downsize but they will need fewer, and they will sit in garages far more than ever. Vehicles and homes have sucked up a SIGNIFICANT portion of folks income in the past. Coupled with super low interest rates, look for what they spend in this area to drop substantially. Also homes will be downsized and even more people may seek to rent and prices continue to decline in many areas. 3. Fed sees a 15 year bear market for stocks. Nothing new here, but it does confirm many of the new secular trends developing whereby the boomers are going to continue to effect the US domestic economy for years to come. This means that while boomers spend less, and save more, or look to stretch their dollars further, exporters to US will have to continue to seek ways to become even more competitive driving costs for many things far lower. Many countries now have well developed mfg bases and continue to 'steal' technology content, so that China won't dominate but many countries will all learn to compete even more strongly. This is secular. Coincident with this will be an entire revamping of the US economy. Many companies may seek to return jobs to the US. It won't be wholesale, and across the board, but its going to reverse the trend thats been in place for the past 3 decades of 'off-shoring.' Even more Chinese companies will look to build plants here, while seeking to remain competitive and maintain quality. 4. Massive US de-militarization around the world. This will have a huge impact in many ways, but it just makes too much sense to eliminate hundreds if not thousands of military bases. With the advent of long range satellite technology, unmanned craft, and drones, vastly improved military technology, their simply is far less need for bodies and a physical presence on the ground. Military conflicts will decrease in magnitude, as the world becomes far less dependent upon OPEC. 90% of all hostilities originate in the middle east. Look for that to die down immensely in the next two decades. 5. Re-surgence of US based use of fossil fuels. Natural gas will be key. Look for a much stronger growth in use of natural gas, and government opening up vast new areas of exploration on shore. While remaining a petroleum dependent economy for transportation, there will be a huge huge change in America's fuel use make up, and as well distribution and storage. Storage is the number one problem of electricity, but America can store vast vast reserves of natural gas EXTREMELY cheaply, and easily. This will only increase, will improving the security and environment of America. 6. Massive government de-regulation. Rules and regulations that have been and are impeding sound economic progress will be thrown out or completely re-written. Debt and deficits will be driving this over now over the next 2 decades, and coincident with the demilitarization trend, and personal lifestyle trends for "downsizing", our government has no choice but to downsize massively. Local and state governments will be forced to as well, with the trend toward massive restructurin and merging of the many many thousands of small governments with each other to make far more efficient use of resources. Muni debt that is unsustainable, with pressures of defaults, will drive this for years. In summary, I don't believe a "bear market" in stocks is necessary, or even necessarily bad over the coming years if it occurs. I think people have begun to pay far less attention to that, and are far more obsessed with their IT mobile devices and information in general that can help them improve their lives. The market could go sideways for many years, and bulls and bears alike will argue which we are in. Secular or cyclical, bull or bear ? And I wholly disagree with trends analysts who forecast all these riots, and civil discord, and class or generational warfare. Just a few years ago, I noticed them, and thought some of this was plausible of course. But again, with technology becoming so widespread in use now, with the expansion of the internet and devices hooked to them, the good will prevail over the bad, so to speak, and people will be far more turned on and excited about using IT for good, and enrich and improve their lives. This garbage argument about the middle class becoming 'poorer' and rich become richer, won't hold water as people will see in the next two decades. The entire world has to find ways to work off debt, or recast it, or dump it, and people who were the creditors (many cases "rich" people), will end up losing. Too bad. they profited in many ways from all the debt, so they can learn to live with and tolerate default just as normal average citizens do. They are not immune or innoculated from bad decisions. I include Buffet in that, as well as Gates. I'm not predicting major falls from grace mind you, but EVERYONE is only human, and NOONE is perfect, and NOBODY has the ability to perfect at every financial decision, and while many bankers have gotten off 'scot free' in a number of ways, more people like that scum who runs GS will be hiring laywers like there is no tomorrow to attempt to mitigate the damage. What goes around, comes around, as it always has, and always will. Karma can be a b*tch, and it will be for many of those people who brought this financial crisis on, and profitted heavily from it. They are all running quite scared, and you only have to work for any number of security firms to know what I'm talking about. These are all things that make sense to me, and may be uncommon logic, and may seem hopelessly optimistic, but the forces and underlying drivers are in place for many of these trends to play out over the next 20 years. We shall see. Of course I could be wrong. But I may end up being quite right.