♠ Posted by Emmanuel in Casino Capitalism,Hegemony
at 8/01/2007 04:03:00 PM
Columnist Paul Farrell of MarketWatch has a short list of the possible triggers for the demise of the five year US bull run. I could toss in a few more possible triggers like a second major terrorist attack, passage of one of the China currency bills, or an international sell-off of US Treasuries. But, his list is pretty comprehensive, though he does exaggerate that an invasion of Iran could bring about "WWIII." So many problems, so little being done to mitigate them before they worsen:
1. War/military defense budget busting
1. War/military defense budget busting
The tab on the Iraq and Afghanistan wars is now over $600 billion, with long-term estimates exceeding $2 trillion. Now many neocons openly predict the president will invade Iran before the next elections. WWIII will be the new "unintended consequence."
2. Real estate bubble raging
Inventories rising. Prices declining. Subprime failures rippling through hedge funds, banks. Home builders' guidance bleak. Declines expected into 2008 and beyond. The Economist says global housing is "the biggest bubble in history," fueling stock market speculation.
3. Foreign trade imbalance, trillions new debt
We spend like teen drug addicts with stolen credit cards. To pay, we're forced to borrow an unsustainable $1 trillion annually. Foreigners now own over $2.5 trillion of America.
4. China's economy overheating
She's smoking! But the Beijing bubble could pop long before the Summer Olympics.
5. Private-equity credit imploding
Moody's downgrades their debt. Credit crunch. U.S. economy hit. Blackstone "flips" Equity Office Properties in five short months. Congress may kill tax breaks.
6. 'Homeland Insecurity' failures
Borders leaking like sieves. Ports and chemical plants unprotected. Meanwhile, FEMA governed by politics, "gut instincts" and "good-job-brownies," not intelligence.
7. Hedge funds hurting retirement plans
Assets doubled since 2000 to over $1.3 trillion as pension funds, discouraged by low stock market returns, take bigger risks, further endangering your retirement.
8. Oil rocketing toward $100 a barrel
Crude's again pushing new records. Detroit is no longer the "Big 3," yet continues fighting increases in mileage standards, while marketing to the big gas-guzzling egos.
15. Personal savings shortfall
16. Consumer debt surging
17. Corporate pension defaults
18. Local government pension deficits
19. International credibility deficit
20. Washington politics in endless gridlock
9. Weak U.S. dollar keeps sinking
Foreign nations are diversifying reserves away from an ever-weakening dollar, further damaging America's global credit rating.
10. Federal budget deficits
GAO head warns America's headed for "bankruptcy." Federal debt now $8.7 trillion. We'll add another $200 billion this year. By 2010, interest on debt will equal the defense budget.
11. Social Security entitlements
Economists call it the "coming generational storm," estimating massive 44% cuts in benefits or 44% increases in taxes. Time bomb ticks as politicians babble on, in denial.
12. Medicare's massive deficits
Big pharma's greed controls. Prescription drug benefits added unfunded $8 trillion. Estimates of $36.6 trillion deficit by 2027. Going broke faster than Social Security.
13. Health-care-insurance deficit
Yes, "Sicko;" with 47 million uninsured, costs skyrocketing, inflation rampant.
14. Climate change fuels global wars
Not Gore: The Pentagon's own research says "climate change" is the "mother of all national security issues," creating geopolitical conditions triggering wars worldwide.
15. Personal savings shortfall
We love consuming! So America's savings rate is below zero, from 10% in early 80s.
16. Consumer debt surging
Except for the military, Americans don't know "sacrifice." We live beyond our means. Consumer debt exceeds $2 trillion. Bankruptcies and foreclosures accelerating.
17. Corporate pension defaults
Congress lets pension funds use unrealistically low estimates of future returns which create underfunding. Later, after benefits disappear, U.S. taxpayers must bail them out.
18. Local government pension deficits
Over $400 billion of entitlements will exhaust local taxpayer resources. And in a recession, collapsing revenues will make matters even worse.
19. International credibility deficit
Gitmo, Abu Ghraib, black sites, wiretapping, more: America needs an image makeover.
20. Washington politics in endless gridlock
Which is more childish: Republicans vs. Democrats? Or Lindsay, Britney and Paris? At least the Hollywood trio can't set up a global meltdown, like our do-nothing leaders.
