Wall Street new round of layoff

Economic growth is based on savings and production (why you think china is taking over?) and NOT on consumption and borrowing (why you think the US is sinking?).

Economic growth of the nation (EC) is the increase of the value of the total goods and services that are produced and sold. A nation has to be able to produce the goods and services, and as much to be able to sell those goods and services. EC has a long-term horizon and it's measured in percentage changes in GDP.

It's not about savings. In fact, if you save too much and do not use your excess money to reinvest then you would keep your money (and stay rich) but your growth would stagnate.
 

Abdel

Economist
Economic growth of the nation (EC) is the increase of the value of the total goods and services that are produced and sold. A nation has to be able to produce the goods and services, and as much to be able to sell those goods and services. EC has a long-term horizon and it's measured in percentage changes in GDP.

It's not about savings. In fact, if you save too much and do not use your excess money to reinvest then you stagnate.

First, sorry to the person who started this thread. I know this post have nothing to do with the intended subject.

The bottom line is this:
1) China = save, invest and produce = They are taking over
2) USA = borrow, spend and consume foreign products = They are in a free fall

'Nuff said. lol
 
Crime rates are going up -- I just don't think they're necessarily reflected in the official stats. Also, the crimes seem to be becoming more violent, at least in my neck of the woods. If one lives in a gated community or in an expensive 'burb with vigilant police, one may be insulated from what's happening elsewhere......

What do you think of this article then ?

http://www.nytimes.com/2011/05/24/u...n&st=cse&gwh=161288B7F586A74315D9F9377C87FA5E

Stop cooking up your own theories
 

I'm not really keen on communicating with an obvious twit like you. On top of which I stopped posting in this thread as I was going off-topic. And googling and finding an NYT article running counter to my thesis of increased crime (which I explicitly mentioned is not reflected in the official stats) seems not to require any great acumen. But since you're asking me a direct question, I don't much care for the NYT and I put about as much credence in the official crime stats as I do in the stats for unemployment and inflation. I note in passing that even the NYT article is having to concede increased crime in NYC.
 
First, sorry to the person who started this thread. I know this post have nothing to do with the intended subject.

The bottom line is this:
1) China = save, invest and produce = They are taking over
2) USA = borrow, spend and consume foreign products = They are in a free fall

'Nuff said. lol

That's still too bold of a statement. You have to look at the wider horizon. China is growing fast because they have a lot of room to grow and a lot of cheap labor. They will reach a point one day when they exhaust the cheap ways to propel their economy. Housing bubble is also a threat, have you seen videos of Chinese ghost cities?

Taking into account population, US is still in the top ten ranking of GDP per capita, somewhere behind Qatar and Switzerland. China is on ~100th place in the company of Algeria and Jamaica. US does have a problem with overspending (two wars) but it is not in a free fall, US GDP slowly but growing.
 

Abdel

Economist
That's still too bold of a statement. You have to look at the wider horizon. China is growing fast because they have a lot of room to grow and a lot of cheap labor. They will reach a point one day when they exhaust the cheap ways to propel their economy. Housing bubble is also a threat, have you seen videos of Chinese ghost cities?

Taking into account population, US is still in the top ten ranking of GDP per capita, somewhere behind Qatar and Switzerland. China is on ~100th place in the company of Algeria and Jamaica. US does have a problem with overspending (two wars) but it is not in a free fall, US GDP slowly but growing.

In my previous post, I was looking at the fundamentals. Sure, China has it's own problems but their fundamentals are more sound then the ones in the U.S.

Remember, China has +3 trillion in foreign reserve while the U.S have a $14 Trillion debt (but if you add the governement obligations: medicair, medicaid, social security, freddie n fannie, the U.S debt is hovering over $60 Trillion). All the U.S have to repay it's debt is a printing press lol.

When it comes to the US GDP, remember, it is 70% consumption based on borrowed money. That GDP can evaporate tomorrow morning (I'm a exagerating a little but you get my point). Withing a decade China became the world's #1 : Automobile Market, Art Market, Investment in Renewable Energy Market, Real Estate Market (eventhough that bubble will eventually burst) using the 'saving,investing, producing' system. Meanwhile, the US used the 'borrow,spend,consume' system and what happened in the last decade? Exactly, lol

And when you look at the GDP per capita, you have to look at the income gap wich of course, in the US. is at an ALL TIME HIGH.

Again, sorry for the off-topic.
 
I am sorry, but China is a developing nation. They have 25% of their population beginning to possibly obtain middle class income and standards of living. The other 75% live in 3rd world poverty. The country has massive pollution and environmental issues. Also serious potential social unrest. China has a massive savings rate because they do not have the social nets that the US or Europe have.

Once again, I respect and consider China to be an ally. I also do not think the USA is perfect or is some overlord to China, but saying that because the USA is a debtor to China, that China is all powerful, is to ignore reality.

I will remind you all. It would be politically positive to simply inflate the currency and pull all manufacturing back to the USA. Unemployment would drop below 5%, take coffers would swell and we would still have the most powerful currency and stable nation so we would remain the reserve currency. China would have 20-30% unemployment, their growth engine would slow or stop and the Communist government would have to deal with massive social unrest.
 

Abdel

Economist
To predict the long term perspective, all I care about is the fundamentals. Sure, as I said, China has it's own problems. but if you look at the fundamentals (economic that is) of the US, they are much much worse.

The ONLY thing that could derail the China story is if they don't fix their water problem. That is the ONLY thing that could ruin everything.

And they are investing billions of $ to improve that situation.

One more thing, 8 out of the 9 last chinese leaders were engineers. While most of the current/ex US leaders are/were lawyers.

I thought it might be good to share this info :D
 
Yes, because quant/engineers are always the best thinkers **cough** LTCM **cough**

China has a lot more problems than just water.

But yes, currently, China looks to be in a more advantageous position, no doubt. All I am saying is that they need to stay the course for a long time to get really comfortable.
 
I feel the same way as Anthony - great for China they are growing and great for Chinese people.

But saying China is overtaking and US in free fall is not correct at all. China is growing because they have been in New Economy for 20 years only and they have much room to grow. The state of their economy is like US in 1920s-1930s: a lot of production and a lot of pollution. Most of the Chinese are still below poverty level. Chinese economy is very much export-oriented and China will stall without exporting. The state of their economy is better than in the US at the moment but we have to see what's coming. Looking at Japan - double digit growth through 70s and 80s and zero growth in 90s.

Financial jobs market in the US is over saturated it's not a secret.

On the other hand US has started moving production back to homeland:

http://finance.fortune.cnn.com/2011/06/29/return-of-american-manufacturing/
 
I will remind you all. It would be politically positive to simply inflate the currency and pull all manufacturing back to the USA. Unemployment would drop below 5%, take coffers would swell and we would still have the most powerful currency and stable nation so we would remain the reserve currency. China would have 20-30% unemployment, their growth engine would slow or stop and the Communist government would have to deal with massive social unrest.

*Facepalm* what an ingenious solution....
 
This is what I said in my post on page 2:

''In my opinion, over time, it will get harder and harder to find a job as a FE (or in finance in general) in the US. The jobs won't be lost, they will be shifted away to others financial centers (HK, Singapore etc.).''

:D

Outsourcing manufacturing jobs too China, Indonesia, Philippines and so on makes sense due to the trivial reasons - cheap workforce, tax-regulations, etc.etc. but moving production sites to offshore doesn't at all eliminate the need for more administrative works in domestic country. I once mentioned (as I remember) that one of the most famous economists in US argue whether outsourcing is beneficial or not for USA. Paul Samuelson says it is not, since huge amount of jobs have been lost and earnings doesn't cover the harm caused by unemployment. Jaggish Bagwatti wrote a rebuttal to Samuelson arguing that outsourcing gives the US net benefit, since people who become unemployed temporarily are retrained and reemployed some time later in a more productive industry - this kind of industries create a link between the financial jobs created and corporations moving out of the country in the sense that more manufacturers move offshore, more demand will be in the domestic country for financial positions. What is the baseline of exporting financial jobs? Demand for them has been slowing due to some other reasons caused by global financial collapse. If financial jobs disappear, what is then left from US? Hollywood and some big software companies? They are escaping tough regulations and expensive workers too...
 
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