THE ENTERPRISE
A series of important issues (no answers--yet.)
---Beware of government statistics.
Often "Wall Street" responds to a recently released piece of government statistics. First of all, Wall Street can't react--it a street--but seriously, it isn't a singular force. It is more like a bee hive that reacts as an entity made up of thousands of bees that feel threatened. Well, I have big news for all those buzzing bees (and stock analysts and investors). Most government statistics are sufficiently flawed at the first release that they are "adjusted" in the next few weeks. Sometimes the adjustment is up. Sometimes it is down. And sometimes it is simply a manipulation to please whatever constituents that agency is beholden to. Few people are skilled enough or insightful enough to understand the basis for many government stats, and even fewer are savvy enough to guess what the adjustments will be. Be very careful in reacting to such numbers.
---Housing is slowing.
Having just thrown a rock at government issued statistics, I will make a prediction. Housing is starting to slow down, and it is not a glitch in the statistics. Housing inventory is up--in some places way up. A few of the lesser indices are showing the same thing, and the more courageous, less politically motivated columnists, analysts and bloggers are all singing the same tune. It isn't a crash or a bursting of the bubble--at least not yet--but it is the beginning of a gradual slowing. Watch it carefully, because its effects will be far-reaching.
---Our love-hate affair with China
A couple of years ago I wrote a novel--THE SILENCE--about a Chinese conspiracy and cyber-terrorism. It is still available, and while I was a rookie novelist, the story is as valid today as it was in 2002 when it was published. (If you go looking for a copy, buy the hard cover version. It has all the typos corrected. Amazon.com and Barnes and Noble (bn.com) still are carrying it. A lot of what I wrote into the novel was nearly factual, but with the fuzzy boundary between fact and fiction. A recent Wall Street Journal article, "The FBI Sees Big Threat From Chinese Spies" discussed the growing concern with Chinese spies. I chose them as the "villains" in my novel because they simply were the most logical country to attempt to dominate the world--by whatever means necessary. But that was fiction, and now I want to pose a real series of conundrums:
The US is in an intense love-hate (& fear) relationship with China as a country.
-It can't do without China as a source for low cost, competitive products.
-It hates the trade imbalance that creates.
-The US fears the day when China doesn't choose to buy huge quantities of its government bonds.
-But it also rues the day when China can claim equal global power and influence.
-The US loves the speed with which China can both create new products.
-It also covets access to China's enormous purchasing power.
-Finally, the US fears that China's military might is growing far too fast.
But what do you so with a huge, immensely strong adolescent that might suspect his own strength, but still lacks the coordination to use it and the wisdom to take advantage of it?
We Americans just can't make up our minds about how to feel about China. CNN commentator Lou Dobbs vilifies the Chinese (and all outsourcing suppliers) nightly in a misguided vendetta to hold back the tidal wave of global competition. This country has competed well and thrived on its competitiveness for a century or more. The question is whether it still can? Or whether the 21st Century will belong to the Chinese, as the 20th Century belonged to the USA.
I don't pretend to know the answer. As surely as I know Lou Dobbs has it wrong, I know that few of us "has it right." We need to understand much more deeply if the Chinese are evolving toward being a responsible global citizen or a dominant adversary. That means taking China seriously, but neither under- nor over-reacting to its posturing. I will be working diligently to learn more and understand more. I suggest you might want to also. The media is full of analysis--some thoughtful and some shallow and irrelevant. Read, think, discuss, be selective and learn. Why? Because our future depends on it.
---Washington DC: "closed for the summer."
FINALLY, a closing observation made to a colleague that I decided is worth saying here:
"It's time that some of the hand grenade throwers (mostly in the media, but also in both political parties) either come up with some practical proposals... or just shut up! Now is the time the American people need strong leadership, not a bunch of naysayers--and frankly, we need a bit more "balanced" leadership than we are getting, too. It's bad enough that the American people have tired of being afraid of terrorism, and are willing to abandon the fight against terrorism. (I know--the "fight" is misguided, say many, but I don't care as much about that as the fact that we must continue to "fight" even if the effort needs to be refocused.).
There are a raft of serious problems in our country that need fixing, and none of them are getting fixed and Washington is "closed for the summer." Between myopia and obstinacy in the White House and reactionary obstructionism in Congress...the ship of state is stalled in the middle of what will be increasingly stormy seas. Will some of you elected/appointed officials in Washington--Congress AND the White House--please wake the hell up and come back from vacation to work together on something besides getting re-elected?"
Best, John
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