Cheer up -- and start thinking 2010

alls sounds real good EXCEPT for the fact that our GDP depends on consumer spending.  almost 70% of our GDP is based on consumer spending!  this would not be a problem EXCEPT for the fact that we run MASSIVE trade deficits.  the US is essentially a cannibalistic economy; we depend on our own spending to drive our economy and do NOT concentrate on selling our goods (whatever that might be...) to the rest of the world.  we as a nation become poorer and poorer as time goes on because of our massive trade deficits!  we are shipping our wealth overseas...that's what a trade deficit is...sending our wealth as a people and a nation to other countries.

we have become a complacent, obese, lazy society that focuses solely on immediate and sustained comfort.  gotta have that new SUV, gotta have that 5000 square foot house, gotta have that vacation house, gotta eat out 4 nights a week.  and the rest of the world has been paying for it...by loaning us the money that we shipped to them via the trade deficits.  Guess what...looks like the party is over...they actually expect us to pay them back????  especially if we expect them to keep loaning us the money, they expect better guarantees, and higher interest rates...you know, the whole risk-reward thing.

two years ago i was hearing from everyone that we would never have a nationwide downturn in housing (the fact that anyone with a pulse was qualifying for a mortgage didn't seem to affect their beliefs???)...and now i'm hearing non-stop about "signs" and "hopes" and "green shoots" and "V sape recoveries" and all the rest.

JUST STOP IT!!!!  i am all for recoveries and do believe in self-fulfilling prophecies...but give me a break.  we will be in a bathtub shaped economic state for the foreseeable future...that means at least 4 or 5 YEARS...not months!!!!

all you have to do is look at what happened in Japan, and then realize that our situation is something on the order of 10 times as bad.  the FED can print all the money they want...all that will do is lead to inflation.  do you really think China will continue to invest in the dollar (YES that's what the are doing when they invest in the US) if the FED continues to devalue it??  well i guess they might; considering that they have few other choices...but you can be sure that the risk-reward curve will demand much higher interest payments. 

Solutions: CUT THE TRADE DEFICIT!!!!!!!!!!!!!!  stop sending our country's wealth overseas.  how??  well a good starting point would be nuclear power...we HAVE the technology...we CAN do this.  100 new nuclear breeder reactors by; dare i say, 2020!  you want to spur the economy with real, highly educated, technical jobs...this is it.  i read that 18 billion was approved for new nuclear power plants...are you JOKING????  how about 500 billion...that might do the trick.  and the rewards down the road WOULD BE IMMEASURABLE!  a whole new class of educated engineers and scientists (sorely lacking in our present society!!) and high paying respectable jobs that would be creating an infrastructure in this country that could and would eliminate our utter dependence on foreign oil.  we seem to throw around billions of dollars just willy-nilly these days...how about devoting 500 billion dollars to something that would actually be useful and would sustain our energy needs through the next century!

ok...i am ranting at this point...that's it

budd do you realize the stuff make nuclear power also rare on this planet? they gona run out before oil does thank you very much!

I think Markman is making the point that this may be a good time to position one's self to make some money in a market run-up.  Now we can sit around and argue ad nauseum about whether he is right or not, but the fact remains that there are signs that point to at least a modest recovery.

Has the market already discounted this?  Who knows?  I don't know, and neither does anyone else, by the way.  But considering the 2-3 per cent returns on government paper, I'll take my chances in the markets.  One thing I have noticed in bear markets, when gloom and pessimism abound,  a market run-up is usually not far off.  Why?  Well, because everybody who wanted out is already out, sitting on the sidelines wondering what to do with their cash.  Eventually, greed always triumphs and they return to the market because they know that history shows market returns always exceed that of fixed instruments.