Today corporate news is grim. While corporations have stored up cash reserves for the last six months, CEO's are reluctant to spend money on expansion. The morning news was full of corporate Amerca's reaction to underlying weaknesses. CEO's appear to be passing the "spending" baton to consumers, who are also cutting back. Home loans and refinancing hit some lows and consumer confidence is usually tied to this measure among others.

This may spell another round of tightening capital.

THis is not good news for Bush. However, whenever there is tight capital, there are usually government schemes to redistribute capital. Some of these schemes have included IRA's, personal health savings accounts, and social security savings accounts. The theory seems to be that investments will spur the market upward and as an aggregate, American workers represent a huge spending block. Freeing up choice will put "elan" back into the economic gears--so the theory goes.

This administration will likely put together "Policy" that will free up this capital and put it in the market. These schemes work for awhile, until capital tightens again.

I would like to hear your thoughts on this...but please--no rhetoric or hit and runs!

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Those who define have the power. http://www.news.cornell.edu/stories/...heney.ssl.html

Alan Greenspan insisted recently that this weakness will be short-lived, blaming temporary factors such as recent leaps in fuel prices.

He just raised the interest rates for the second time in two months.....because he sees lots of figures that shows the economy is heating up. When a Fed Reserve Chairman raises interest rates, that is a good sign for the economy. And that's why yesterday when he raised them for the second time, the markets reacted positively.

And he said that the biggest rebound in corporate profits in 20 years will eventually lead to more jobs. Jobs are always a "lagging indicator" and this time they have lagged a little longer because we're also fighting 2 wars and instability around the world's oil supplies.

"There have been much clearer indications over recent months that conditions in the labor market are improving," Greenspan said.

As far as capital expansion, I'm sure many corporations are waiting to see what the election results are. If George Bush wins again, they will go ahead with the expansions. If John Kerry wins, they will NOT.....as he has said he'd raise taxes on corporations. It's as simple as that.

I would like to know more about economic theory and contraction/expansion of capital markets and manipulation of the same for short term profit.

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Those who define have the power. http://www.news.cornell.edu/stories/...heney.ssl.html

Hmmmm......sounds like an Economic Course would help you.

I had two or three in college. But that was years ago. So, unless I pulled all the old books out and studied them again, I doubt I could help you. Seriously, a good course might be helpful.

He would not blame his inept policies would he? He's always a cheerleader, when he testifies - he "sells" his work.

When a Fed Reserve Chairman raises interest rates, that is a good sign for the economy.
Unless the only reason to do it is to stifle skyrocketing inflation even at the expense of growth and job creation. Economists are revising future GDP projections down to 2% which is nothing to write home about.

And he said...Jobs are always a "lagging indicator" and this time they have lagged a little longer
That's what he's been promising for the last 3 years. Right now we're "only" about 7 million jobs behind comparing to a "normal" recovery

because he sees lots of figures that shows the economy is heating up.
Over the last 1.5 - 2 months all economic indicators were extremely negative, significantly below expectations.

If George Bush wins again, they will go ahead with the expansions. If John Kerry wins, they will NOT..
Anecdotally mutual fund managers collect money for Kerry campaign (heard it on CNBC), 53% of hedge fund managers support Kerry, more than 200 leading businessmen (including former bush supporter Lee Iacocca and lots and lots of others) support and campaigned Kerry. Why would they do that?

I have to say--your atavar and name cracks me up!

This morning the talk on the money channels was all about how CEO's were NOT going to be hiring--NOT going to be expanding. They are not talking Kerry or Bush--they are talking shaky economic trends that have apparently been shaping up as a new extensive contraction. This appears to be much more than "lagging" indicators JP5...this is shaping up to be a new imbalance.

I have also had economic classes, but it was several years ago for me. My gut tells me this is a new wave of worldwide contractions of capital and there is a cycle that we can only bandaid with freeing up capital like social security, medical savings etc.

I would like to get some input from those who really understand the international capital theories. Anyone out there?

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Those who define have the power. http://www.news.cornell.edu/stories/...heney.ssl.html

What specifically is the issue? Answering that question is akin to writing a book! Do you have something more specific?

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I wasn't born with enough middle fingers.

To me the current U.S. ecomony is very simple. Maybe I'm simplifying it to the extreme, but it makes sense to me:

The total amount of money in America continues to decline. More money goes out than comes in (constant trade deficit).

More Americans are created every day, either through birth or immigration, at a ratio that is higher than death and emmigration.

More good American jobs are being lost and sent overseas.

So, more people, fighting for the same pool amount of money, which is steadily getting smaller.

The overall economy can only go one way until all of these factors change. It may fluctuate, but in the long run, everything will decline.

Things that can change this:

(1) Less people fighting for the limited money - mass death or emmigration? Not likely.

(2) Some new invention that America can monopolize on for a decade, that the rest of the world really needs and will pay lots for. This will have to be so big that it destroys the trade deficit and creates a very large positive deficit. Even if this happened, it would take a decade for the money to trickle all around the country.

(3) The government taking tax measures on imports to help lower the deficit. Even if this is implemented (say heavy tax on Chinese imports), I don't think it would help and it might make things worse.

(4) The U.N. / U.S issuing some labor/pollution standard that forces the cost to produce foreign made products to be much more costly. I don't think this is likely for a long time.

(5) The upper 1% of the wealthy in the country either voluntarily (or through much higher taxes) give up their interests in other countries and move that money to America. Not likely.

The 5factors you outlined are worthy of consideration.

If we extend this limited capital theory internationally, does the colossal trade imbalance indicate a worldwide rebalancing of economic power?

Are there graphic models that would show this shift?

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Those who define have the power. http://www.news.cornell.edu/stories/...heney.ssl.html

http://internationalecon.com/tradeim...roduction.html

It's long, but Econ can get complicated. That's why it's best left to the professionals!

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I wasn't born with enough middle fingers.