The Good, The Bad & The Ugly

The Good

There are good things happening... Adam Smith would be proud. 2009 is the beginning of a new, underground, service-based economy. Like a horde of awful Cicadas emerging from the soil after 17 long years, the new venomous entreprenuers of 2009 feast on the corpses of rotting corporate giants. They will be further fueled by an astonishing new generation of technology where dissemination and accumulation of data is the opportunity. They need no financing, capital requirements for the service sector are minimal. That talent is leaving the corporate world in droves is evidenced by strong levels of new business formation. These people are not going back. They don't want to. They can't. The new economy requires a lean business model. (Oh, I forget to mention you should have both lower prices and better service than any of your competitors if you expect to stay in business...it is a jungle out there.)

Bottom Line: There are opportunities out there if you are scrappy. Putting your money into the stockmarket? Suit yourself and buyer beware.


The Bad

It's amazing. History repeats itself. Watch... see it happened again!

The government stimulus does not stop, its getting bigger. As long as there is a lender, the US Federal Government will be a borrower.

The real estate/commodity bubble from 2005-2007 was financed by an unprecedented injection of cash flow into the bloodstream of US consumers until even the flakiest banks/realtors/developers/investors/regulators/homeowners/etc. could not be convinced that the market had further upside potential.

Today, witness the US government experiencing the 14th consecutive month in June 2009 of declining revenues; at the same time preparing to increase the debt load. It sounds oversimplified, but amazingly the US Goverment is following the identical model which we now call the "mortgage credit crisis". The government's "debt/income" ratio is off the chart. And it's lenders will soon wise up.

Bottom Line: Look Out. The government's loan payments will be due soon... who is going to pay?



The Ugly

Sorry in advance to you blue blood types out there, but you make such an easy target :)

Meanwhile, there is a totally seperate class of market participants getting richer. The big money in this country is getting bigger (unless you are Bernie, Denny or Tommy). Bank lending is increasing slightly, but the borrowers are primarily well heeled entities taking advantage by scooping up cheap assets. It's like shooting ducks in a barrel, for those of you from Up North. Trust fund babies... breathe easy, your future is becoming more secure as we speak.

Bottom Line: The sure thing, easy money is being made now by those with deep pockets.