014's GDP Final Revisions: -2.9%, Looks Like Another Recession
06-28-2014, 12:37 PM
Speaking for the older guys on this page, I would caution the younger folks not to put too much stake in either "doom and gloom" or the opposite, which has been aptly named irrational exuberance.
I recall, in both the late 1970's and in 1990, the U.S. was mired in what at the time were considered severe recessions, though they were mild compared to what we experienced in 2008. In 1990, the consensus was that "America is over" and Japan would dominate for a century. Oh, those clever and industrious Japanese! They save so much! They work so hard! They will never decline! Except, of course, they did. And for the last 24 years, they have been mired in one slump after another. The U.S., meanwhile, rebounded despite it's obvious challenges for one primary reason: Innovation. And I would argue that innovation has just started. You think airplanes and automobiles and computers and smartphones, the innovations of the last 100 years, improved peoples standard of living? Wait until 50-75 yrs from now when we are reprogramming our DNA to eliminate cancer or regrow a damaged organ. I think, on a global basis, man's standard of living will increase dramatically in the next 100 yrs.
That's not to say it will happen all at once or in a straight line. Twice in the last 15 yrs foolish investors bought into a silly phrase that caused them to purchase assets at ridiculous prices: The tech bubble of the late 1990's and the housing bubble of the early to mid 2000's. And the phrase that foolish, greedy people glommed onto like a hungry baby glomming onto his mothers tit was this: "IT'S JUST GONNA KEEP GOIN' UP AND UP...FOREVER!!" Sorry, bunky, nothing goes straight up - or straight down - forever. Things go in cycles. The wise among us learn to read the signs as to what phase of the cycle we are in, and adjust accordingly.
I recall, in both the late 1970's and in 1990, the U.S. was mired in what at the time were considered severe recessions, though they were mild compared to what we experienced in 2008. In 1990, the consensus was that "America is over" and Japan would dominate for a century. Oh, those clever and industrious Japanese! They save so much! They work so hard! They will never decline! Except, of course, they did. And for the last 24 years, they have been mired in one slump after another. The U.S., meanwhile, rebounded despite it's obvious challenges for one primary reason: Innovation. And I would argue that innovation has just started. You think airplanes and automobiles and computers and smartphones, the innovations of the last 100 years, improved peoples standard of living? Wait until 50-75 yrs from now when we are reprogramming our DNA to eliminate cancer or regrow a damaged organ. I think, on a global basis, man's standard of living will increase dramatically in the next 100 yrs.
That's not to say it will happen all at once or in a straight line. Twice in the last 15 yrs foolish investors bought into a silly phrase that caused them to purchase assets at ridiculous prices: The tech bubble of the late 1990's and the housing bubble of the early to mid 2000's. And the phrase that foolish, greedy people glommed onto like a hungry baby glomming onto his mothers tit was this: "IT'S JUST GONNA KEEP GOIN' UP AND UP...FOREVER!!" Sorry, bunky, nothing goes straight up - or straight down - forever. Things go in cycles. The wise among us learn to read the signs as to what phase of the cycle we are in, and adjust accordingly.