Quick US Economic Turnaround?

The prevailing view is the US Economy is in deep trouble, in recession and even in depression according to some observers. Also it will take at least a year or even several years to turnaround. Based upon today’s data there is much to support this view.

In a previous Allan’s Take I pointed out that watching the corrugated box industry often portends any economy’s future direction. I said the turnaround could be over a year but the key was to watch the purchase of corrugated box making equipment and the boxes themselves.No this indicator has not turned yet but I suspect it will turn by next spring, well before most pundants proscribe today. Why? Read on….

Job destruction is the leading reason waved indicative of impending economic doom. If you look at the 9 million jobs lost this year and 27,000 job cuts across large enterprise just last week it is sobering.

Consumer income declined over recent years along with the largest dive in consumer outlook in US history are also cited as indicators of an extended recession as consumer spending is the key driver of the US economy.

Allan’s Take Counterpoints:

1. President Obama is seen by most American’s and many non-Americans across the planet as a huge refreshing Ocean breeze. Tomorrow nearly ALL economic & political problems will be wrapped up into a big package labeled, BUSH, and shipped off to the PAST.

2. Americans are the most CAN DO people in the world. Living here in Florida you can feel the national energy growing, an excitement and enthusiasm gathering steam.

3. World governments are throwing everything they can think of to resolving every economic/financial issue. They will win. They have the ability to infuse huge amounts of money, to print money at will, to change regulatory, tax and other policies. They will win. I can’t say that line enough. The US has taken the lead on these initiatives and President Obama is a strong advocate of active government. The result more government interventions. The Bank of England is reducing interest to 1%, consider the rate has never been below 2% over the past 400 years!

4. Job destruction is mitigated by all the employment that is off books. There are millions of people making part and fulltime incomes on eBay among many other off book mechanisms. The level of trade and barter has been increasing for decades. The evidence of this is all around us.

When I lived in Belgium the National Bank of Belgium hired me and I was given a large binder of Belgium economic data showing all the unemployed and all the negative economic figures. Yet as I traveled the country I rarely saw any vagrant people. The shops seemed to be filled, the economy seemed to be robust. The explanation I was given was that some 20-25% of the Belgium economy was grey & black. I was surprised. I knew that South American countries had large black economies but I assumed Europe was different.

The world’s black and grey economy is huge. The best estimates indicate it approaches 30-35% of the global economy. Thus, you must take into account there is a lot of money driving the global economy coming from work done by people withOUT jobs or least those jobs on the books.

5. Consumer income has actually been increasing NOT declining for decades.

• While reported wages have fallen 4% from 1975 to 2005 benefits like health insurance, pensions and paid leave have risen so that median wages rose 28% during the same period.
• Households have gotten smaller during the same period so that wages actually rose 44%.
• When you add in other types of income like eBay and barter US families are doing quite well thank you very much. When I lived in Sweden I was told by the King of Sweden, “Allan, we Swedes like to complain a lot but we live well as you can see.” We were both sitting in a sauna in Hellsingland.

The US markets were up 3% today, Election Day. This is the highest rise on any election day in US history. Never underestimate the ticker tape. Meaning the equity markets very, very often anticipate future economic activity and the markets seem to believe businesses will do well and make strong earnings. Allan’s take forecasts a surprisingly quick US Economic turnaround—mid 2009.

For Allan’s Take on Investments & Timing Click.

Click here to Download This Post as PDF File

Posted in Global Politics | 11 Comments »

There’s something happenin’ here:

What it is, is becoming clear

Now entering my 7th decade of life turning 61 this summer and I am witnessing something profoundly different in US elections: an entire cadre of great leaders regardless of party. McCain’s selection of a woman Governor and Obama’s selection of a deeply experienced, capable Washington insider with strong roots among the common folk of America neutralizes the spurious arguments from both sides on personalities and shifts the focus to issues:

Americans are being challenged to select their leaders based more on policy than politics. What’s most intriguing is whoever wins is NOT very important. Sure there are massive differences among the Democrats and Republicans on many issues.

Democrats want to help people directly while Republicans prefer to help people INdirectly. Democrats want to retain a woman’s right to chose while Republicans want to secure the life of any potential child.

Republicans want to secure the right of any individual to possess weapons of all kinds perhaps NOT those of mass destruction but giving up even these is disappointing to some Republicans while Democrats want to increase the safety of people by limiting the types of weapons available. Which side wins will have tremendous effect upon individuals of course and impact their rights and freedoms. These issues are all relatively inconsequential to a far more significant and profound transformation that ALL Americans are just starting to experience.

The important happening is both parties have a slate of candidates who are extremely capable leaders with vision and are capable of working with their opposition. Thus Americans are energized. This election has brought out millions and millions of normally lethargic and disinterested potential voters who are now eager to vote, to get involved, Regardless of which party wins the winning party will work with the other in a new way that we have never seen.

We are embarking on a new era of collaboration. We will be finding common ground. We will be creating new perspectives and we will reach new solutions to old problems as we also encounter new problems and new challenges we will recognize and tackle them rather than ignore or overlook them.

The result will be a newly energized America powered by its people much less encumbered from the usual negativity overlaid by their government and enthralled by a new group of leaders who actually know how and have committed to work together to build a better America. They will be helped by Americans who are becoming better themselves. Americans are being challenged, are being motivated to get beyond themselves to work together to build a better America for others first and then experience the resulting improvement in a better America for themselves.

America has often led the world by showing things are possible, by proving even some things thought to be impossible can be accomplished. Perhaps we are all going to witness in our lifetimes a transformation beyond our countries across the globe. We all know we live and operate in a global community we also know all communities are more focused on themselves and on their own issues and concerns. Perhaps this will change as well as the world becomes as giddy as we Americans are becoming today in what can be done when we embrace rather than fight each other, when we challenge rather than threaten each other, when we help and work together for a common good.

It is a most exciting time in America today and this excitement is growing into enchantment. One implication is for investors. Now is the time to explore making investments in the US. Many assets are at or nearing their lowest levels. The upturn is a year hence. Get ready. Get involved. Almost any well researched investment in the US today will do extremely well in the coming years. Of course you need to wait unit after the election and things settle down both the political and the economic turmoil is just too high right now. For Allan’s Take on Investments & Timing Click.

I used a Buffalo Springfield song to open this missive. The point they were making is we need to stop what we are doing and find a new way forward. It is looking like today’s leadership actually is stopping politics as usual and we Americans are responding. We will be finding new ways forward led by the best leadership talent I have ever seen again regardless of which party you favor, and regardless of which party wins the world will be experiencing new fired up and enthralled hard working and collaborative Americans.

China. “watch out.” you have been on a roll we in America will be giving you a run for your success.

L. Allan Austin

www.allanaustin.com

+1 407 682-3887

Posted in Global Politics | 13 Comments »

Era of Collaboration

 
The US election is just two weeks away. While the largest percentage of Americans is impassioned over this election with deep feelings for their preferred set of leaders I think it largely does not matter which set wins! Why?  Read on…

We are entering an era of collaboration leaving the era of competition behind us and both sets of leaders are exceeding good at collaboration. This may surprise you as you think of all the fighting going on, of all the lipstick being slathered on the lips of pit bulls, and on and on it goes. Well we must stand back from campaign rhetoric and reflect on the actual track records and skills of the four leaders themselves.

Barack Obama is ridiculed for his role as a community organizer as if it is a job of little importance yet ask what does a community organizer really do and really accomplish. The answer is he brings very desperate groups together, people from all walks of life, people who have deep emotional and often conflicting views of each other, people who have not and cannot work together. A community organizer must have the facilitation skills and the leadership skills to cook this tumultuous brew into a fine bouillabaisse. One in which everyone can live and enjoy the resulting taste. Barack Obama has shown himself as gifted in these bringing people together skills which he brought into his legislative experiences both at the State and at the National level.

John McCain is depicted as a rant and rave political right wingnut who will take drastic and inappropriate action. A leader who will force feed the nation. His record in Congress shows the opposite he has brought divergent groups together and formed coalitions to make things work for everyone. He is seen often with his close friend and colleague Joe Lieberman one of the most liberal and most religious conservative members of Congress. His Vietnam experience is heralded and admired by all Americans and non Americans as well. He is a true national hero. Again we must look more deeply at his experience. In prison as a war criminal he learned dimensions of the collaboration process that most people rarely are challenged by and he came through five grueling years having not collaborated with the enemy but having learned how to ingeniously collaborate with his colleagues in prison.

The two presidents in waiting Joe Biden and Sarah Palin are both well experienced and accomplished collaborators. Just look at how well they are collaborating with their bosses. Binden’s Senate experience shows his strong and well exercised collaboration skills. Palin’s major and governor roles show she has brought people to the table and to resolution many many times.

My conclusion:  What the country needs most in the coming years is collaboration to bring all Americans together to work together to collaborate together to create a new economic and political construct for our conjoint success. Also America needs to extend its collaboration platform globally. We have exported so much good and so much bad across this planet on our own with relatively little collaboration we should and I believe this to be true regardless of either set of leaders winning. We Americans collaboratively led will foster a world collaboration launching us into the Era of Collaboration.

NOTE:  For a look at the dark side of each candidate
and for a view from far away see below.

Obama the Darkside

[youtube=http://www.youtube.com/watch?v=1RZVw3no2A4]

McCain the darkside

http://www.rollingstone.com/news/coverstory/make_believe_maverick_the_real_john_mccain

Election in Philippines

http://worldblog.msnbc.msn.com/archive/2008/10/01/1464066.aspx

L. Allan Austin

www.allanaustin.com

+1 407 682-3887

Posted in Global Politics | 5 Comments »

US Elections

Now entering my 7^th decade of life turning 61 this summer and I am witnessing something profoundly different in US elections: an entire cadre of great leaders regardless of party. McCain’s selection of a woman Governor and Obama’s selection of a deeply experienced, capable Washington insider with strong roots among the common folk of America neutralizes the spurious arguments from both sides on personalities and shifts the focus to issues:

Americans are being challenged to select their leaders based more on policy than politics. What’s most intriguing is whoever wins is NOT very important. Sure there are massive differences among the Democrats and Republicans on many issues.

Democrats want to help people directly while Republicans prefer to help people INdirectly.

Democrats want to retain a woman’s right to chose while Republicans want to secure the life of any potential child.

Republicans want to secure the right of any individual to possess weapons of all kinds perhaps NOT those of mass destruction but giving up even these is disappointing to some Republicans while Democrats want to increase the safety of people by limiting the types of weapons available.

Which side wins will have tremendous effect upon individuals of course and impact their rights and freedoms. These issues are all relatively inconsequential to a far more significant and profound transformation that ALL Americans are just starting to experience.

The important happening is both parties have a slate of candidates who are extremely capable leaders with vision and are capable of working with their opposition. Thus Americans are energized. This election has brought out millions and millions of normally lethargic and disinterested potential voters who are now eager to vote, to get involved, Regardless of which party wins the winning party will work with the other in a new way that we have never seen.

We are embarking on a new era of collaboration. We will be finding common ground. We will be creating new perspectives and we will reach new solutions to old problems as we also encounter new problems and new challenges we will recognize and tackle them rather than ignore or overlook them.

The result will be a newly energized America powered by its people much less encumbered from the usual negativity overlaid by their government and enthralled by a new group of leaders who actually know how and have committed to work together to build a better America. They will be helped by Americans who are becoming better themselves. Americans are being challenged, are being motivated to get beyond themselves to work together to build a better America for others first and then experience the resulting improvement in a better America for themselves.

America has often led the world by showing things are possible, by proving even some things thought to be impossible can be accomplished. Perhaps we are all going to witness in our lifetimes a transformation beyond our countries across the globe. We all know we live and operate in a global community we also know all communities are more focused on themselves and on their own issues and concerns. Perhaps this will change as well as the world becomes as giddy as we Americans are becoming today in what can be done when we embrace rather than fight each other, when we challenge rather than threaten each other, when we help and work together for a common good.

It is a most exciting time in America today and this excitement is growing into enchantment. One implication is for investors. Now is the time to explore making investments in the US. Many assets are at or nearing their lowest levels. The upturn is a year hence. Get ready. Get involved. Almost any well researched investment in the US today will do extremely well in the coming years. Of course you need to wait unit after the election and things settle down both the political and the economic turmoil is just too high right now.

I used a Buffalo Springfield song to open this missive. The point they were making is we need to stop what we are doing and find a new way forward. It is looking like today’s leadership actually is stopping politics as usual and we Americans are responding. We will be finding new ways forward led by the best leadership talent I have ever seen again regardless of which party you favor, and regardless of which party wins the world will be experiencing new fired up and enthralled hard working and collaborative Americans.

China. “watch out.” you have been on a roll we in America will be giving you a run for your success.

Posted in Global Politics | No Comments »