EETimes.com – Meltdown unlikely, says Stanford economist — In case you were looking for good news.
I’ll be here all week! A general economic slowdown is the most likely result of the current woes on Wall Street, according to a leading economist.
The electronics industry should fare better than most in such a scenario, said A. Michael Spence, a 2001 Nobel laureate in economics. However, he cautioned a small risk still remains that the current crisis could lead to a broader meltdown.
“Bottom line is that no one will be untouched, [and] electronics should experience a slowdown but perhaps less so than the financial sector and perhaps the overall economy,” wrote Spence, former Dean of Stanford’s Graduate School of Business in an email exchange. “The IPO market could be difficult for an extended period and having financing and conserving cash by keeping cash burn down would be advisable,” he said.
I’m not worried. I may have to work for 2-3 years more than I expected – that’s life.
On the plus side, I found that YouTube has Mr Bumpy Goes Bump in the Night episodes. So on balance, the world is still sunny.
Its just another opinion. Apparently even the experts can’t tell whether there will be a freeze, a recession, or a slowdown.
Why do folks who refuse an increase in the minimum wage because of the free market, or prevent the offshoring of jobs because of the free market ((two things that directly affect “jobs”)) but fight so hard for a blank check?
They act like welfare bitches needing a fix.
This is looking more and more like global warming.
I think Congress needs to act immediately and support the President. Think of the catastrophe that would have occurred if we hadn’t invaded Iraq when our intelligence people told us that … oh wait…
About time that Wall Street and the banking industry feels the wrath of their greedy, bad decisions.
Let the major banks fail. Plenty of opportunity for smaller banks and new financial institutions to rise and take over providing credit, under guidelines where they…loan to people who can pay back. Lots of capital available to finance these new banks.
Time to make lemonade from these lemons.
#4 jim h
LOL
Good point.
#2 bobbo
It’s not that the minimum wage needs to rise but that taxes should be lowered. Works out the same except now businesses can hire more people and government will have more to waste.
http://www.youtube.com/watch?v=IU6PamCQ6zw
When you start generating profits from virtual financing algorithms, the result is that a certain point the system implodes. The formula of work is: work = weight x displacement, meaning that in order to generate revenue, profit, capital something has actually to be produced. Wall Str. had a wonderful videogame installed in their computers and greater the greed, the higher the score. It amazes me how all those people that made billions from these virtual finance schemes are still at free as they “robbed” from everyone and have inflicted the global economy severe damage. Politicians have closed both eyes while the game was going on, too many goodies to be pocketed to stop it when they could have done so, although warnings had come from many scientists that are part of the philosophical movement for a sustainable life in this world. Last but not the east, the only intelligent and nearest to the truth statement that has been made on the current financial meltdown, was made by Premier Wen Jiabao of China, that during an interview to CNN aired 2 days ago, clearly mentioned the words. “virtual economy”. A good title for a videogame.
“Meltdown likely.” – There, we’ve covered 100% of the possibilities.
Hey. But maybe if there is a meltdown, Wall Street will melt through the Earth’s crust, pass through the core and end up in China… since apparently they own it anyways.
Where’s Michael Douglas when you need him.
The empire of paper is drawing to a close. Woe to those that give paper in place of sweat and blood, and collect the debt of their fellow man! They will reap what they have sown.
Vote McBush/Evita ’08
Keep the String of Wins Coming in the USA!
Just look at our palmares:
Successful defense against 9/11
Successful capture of Bin Laden
Successful defense against Katrina
Successful invasion of Iraq forever
Successful support for nukes in both mortal enemies: Pakistan and India
Successful destruction of Non Proliferation Treaty by enabling nukes in non-NPT signatories India and Pakistan
Successful growth and stability of banking infrastructure
Successful defense of small government starting with $5T national debt which increased to $13T in just 8 years
Successful defense of core American values of citizen liberty and freedom from torture and freedom from warrantless wiretapping and freedom from habeas corpus
Successful stability of dollar to record lows
Successful stability of oil prices and food prices
KEEP UP THE GOOD WORK MCBUSH/EVITA 08 W00T!
WE WERE FOR THE REPUBLICAN PARTY BEFORE WE WERE AGAINST IT!
What difference does it make if the sky is falling? It’s made of air!
The sky is not falling. We are falling. And there is no bottom in sight.
Ironically, the tech sector took a hit today – Google -9%, Apple -17%, Cisco -8%, RIM -9%, Qualcomm -12%. Tough day for all.
That does it. I’m cracking open my own head and feasting on the goo within.
One guy says, things will be OK. Another guy says, It’s the end of the world as we know it.
Time will tell.
In my old age, I’ve found that going with the end of the world guy is always a mistake.
#7–contempt==I don’t think thats right, and since it is “math” we ought to be able to come to agreement?
People on minimum wage don’t pay income tax which is what “lower taxes” usually means. So lowering the (income) tax won’t give poor people more money. Only more money will give people more money.
The business argument is usually that if you raise minimum wages then fewer employees can be employed, but that has never happened before. Silly some still want to argue that.
#18 bobbo:
I know it’s not technically “income tax,” but the one tax that the poor do pay, without exception, is Social Security. That tax sucks 15% of potential wages from everyone.
A two-income family making $24k/yr would have $3600 more every year if they didn’t have to pay the Social Security tax.
$3600 equals…
* almost a year’s tuition at many state universities
* a few months of groceries
* 1000 gallons of gas
* a decent used car
* a low-end family, or high-end individual private health insurance plan from Aetna for one year (in AZ)
* almost 4 months of rent for a family-sized apartment
Now *that* would be a great tax cut for everyone (especially the poor.)
another brain washed college idiot..
china stopped all lending to US banks several days ago… i’d like to know just who congress
is going to borrow the 700bill -should they eventually ram it down our throats..
maybe now we’ll see if there is actually any gold left in Fort Knox. speaking of…i bet gold will hit 1500+ within the next 10days..
2000 in 20…silver, eh..140 onw to 300..
::yawn::
-s
time to move to south of the equator.. ;p
oh hey…wait i have the best short term investment yet in these times..
TREES! -as whole forests will vanish as the
The Fed and every other major bank starts printing up gargantuan amounts of paper to replace the mad runs on the banks..
ps, buy a wheel barrel.. you’ll need it to cart your money to the store to buy bread (or heat your furnace)
#19–brm==no one thinks thats a good idea. I assume you would also do away with social security benefits for those who don’t contribute?
Otherwise, I think a mandatory tax for Soc Sec is a good thing as it brings these low income people “into the system.” People should pay for their benefits as much as possible.
With the lowend competition from illegal immigrants, I’d like to capture their soc sec tax as a small offset anyway.
So, seems to me with everyone’s income averaging up (Congress, Rich Guys) I think the minimum wage should go up for poor guys and our military.
#11: if he can get it up, probably boinking Catherine Zeta Jones.
Oh, who am I kidding. She’s probably changing his Depends®!
Always follow the links…
From the article that was mischaracterized by the Dvorak headline:
Spence cautioned he could not rule out a small risk of a more general financial meltdown.
“The main immediate risk on Wall Street is a complete credit lockup, resulting from damaged balance sheets, lack of transparency and visibility and a downward spiral based on those ingredients. This has started to happen a couple of times and been averted with quick action by the Fed, the Treasury, and other central banks,” he said.
“If this were to happen there would be a very deep recession that would adversely affect the economy broadly and it would show up in reduced demand. It would spill over into the global economy, differentially depending on the region but very broadly. Electronics output and sales would slow dramatically but not uniquely,” he said.
#22 bobbo:
You’re right that it’s not a good idea to just stop paying out Social Security benefits to people who already rely on them. We have a responsibility to make sure those people get what they were promised.
But I don’t think it’s a secret that many people paying into the system will never get any of the money, the way the program is currently managed. Based on anecdotal evidence, I’d guess that most low-income families, particularly young ones, don’t get any Social Security benefits – maybe welfare, but that’s a different program, right? If so, then that money shouldn’t even be coming out of the “Social Security fund” anyways.
So the solution would have to include some cut-off age, probably something in the 40s (younger than the boomers), where we officially end the program, yet continue to make legacy payments to the people who have planned their retirement expecting it. I’m not sure if we could eliminate the tax completely, but we might be able to significantly reduce it.
I don’t think “bringing people into the system” is something to aim for. I just wonder how many of these people wouldn’t need a handout if they got to keep all of their wages.
As far as raising the minimum wage, isn’t the number like, less than 10% of all people make minimum? And aren’t most of those people kids? If that’s the case, then wouldn’t raising the minimum wage simply raise the cost of necessary goods, like groceries and food?
The biggest reason social security was activated was to stop destitute elderly from happening and to give everyone a cushion so that they -may- not have to work their entire lives and end their lives in some bit of dignity.
It changed over time, but that’s the basic value behind it. It’s not supposed to be a free ride, and you are supposed to have worked (you do read the statements they send you every year or two, right?)
Giving people that 10 or 15% back every year will only help in the short term. In the long term, they will be far worse off when they have to continue working until they are 90 because they never have savings and there is no government help at the end.
The gimmee now mentality is hard for humans to resist, and sometimes you have to have the government step in and force them to plan ahead.
Even if we have a good head on our shoulders, things can happen and you still might end up at 70 with nothing but that monthly check. That 15% out of your paycheck is insurance, pure and simple. Hopefully you don’t have to use it.
“It’s not supposed to be a free ride, and you are supposed to have worked”
agreed but all of us know one or more people who are collecting and never worked. This is what is wrong about SS. The people who work and pay into the sysem are the last to collect it.
#25–brm==you are mixing in 2-3 different issues making discussion difficult. The flavor of your comments is a cut and past of conservative talking points against the concept of minimum wage or even of a social safety net.
It looks like every good idea gets corrupted by Congress overapplying something that is supposed to be earned or at least contributory and over time Congress gives it away for free. Still, personally, when I get Soc Sec I will feel I earned it as I have paid into it. If I would stop drinking beer, I should even get more out than I paid in. Nothing wrong with that given the years I worked for minimum wage.
The problem is CORPS are thinking they CANT make a mistake if the GOV pulls them OUT.
This is as BAD as having a DRUGGIE as your child..
you WANT to help…but you CANT..
YOU DONT..
They have to LEARN the lesson, or they will repeat it. OVER AND OVER AND OVER..