The American Nightmare: No Exit, No Entry

people can sing the praises of corporate america as much as they want. however investors who had listened to america bulls five years ago would`nt be very happy right now.

check out the graphs below to see how corporate america (measured by s&p 500 stock index) has performed against emerging asia ( measured by msci emerging asia stock index in u.s. dolllar terms). comparison is for the last five years. click on the graph for a larger image.

u.s.



emerging asia

Apparently my PREVIOUS attempt was not able to stir up much emotion in most chowkies.

Therefore.. here is the appeal again..

I know of this young man Hafeez. He is a bonafide victim whose family is out on the road. Please send him the little you can ...

I have already checked the following (Considering chowkie sensibilities):

1- He has NO political affiliation

2- He has NO Jehadi/Islamist affiliation

3- He is a hardworking law-abiding citizen of the AJK who is working in Lahore as a guard/chowkidar + office boy for lowly pay.

4- He lost some of his family and ALL of his worldly belonging.


PLEASE - please -please help.

You know where to contact me.

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behram #:``You are incorrect when you suggest .... [... And its currency is tanking....]. Actually, the dollar has appreciated against all major currencies.``

Nope. The dollar has tanked against all major currencies. It may have gone up a tiny bit in from where it had tanked to, in certain intervals. But overall, over the past few years, it has tanked. One can simply look at where it was with respect to the other currencies a few years ago. As I mentioned four years ago US dollar bought 62 cents in Canadian currency. Today it gets you 85 cents.............

Warren Buffet, in his annual letter, stated that for the first time in his life, he has bet against the USA dollar.............

#161

Faisaluno:

Global markets are almost always out of sync and that’s the greatest benefit of diversified portfolios. Investment horizon should be at least 7-10 years not just 5 years. Therefore, a market up or down within a 5 year span is interesting to talk about but does not mean much. Having said that, I believe that a portion of our portfolio must have emerging markets.

Japan’s Nikkei is around 14,800 today but was 39,000 or so in 1989. For this period, there are many emerging countries whose market records are much better than Japan. Does that mean that all of those countries are more promising socially than Japan and that Japan is a dead duck?

Investment opportunities and political viability/stability are two different things.

As a Canadian American I will not debate Canadian politics with average Americans who do not comprehend the intricacies of dual citizenry, but will do so with Canadians. Romair, you are one of the few Canadians, even US-returned, who I find agreeing with me that taxes are reasonable in Canada. While we Canucks moan loudly about them being higher while in Canada, we have to literally compare them to the US to realize that most of our provincial taxpayers are much better off than American taxpayers in most US states. Canada has a lot of breaks for small businesses, and Canada Revenue Agency is ever helpful in matters pertaining to setting up small businesses, tax advice and even loan counseling. I have not found the US Internal Revenue Agency as forthcoming, in fact it is a quagmire unto itself.

Canada has made it very simple for immigrants to assimilate at once into its basic infrastuctural fabric, but there are severe hindrances when trying for employment in one’s own area of expertise. In order to immigrate to Canada, the barriers are set uncompromisingly high – college degree, years of relevant work experience, language expertise, friends and family circle, medical evaluations. The healthcare system on the whole benefits by a brushstroke practice of a skewed form of eugenics, and the nation on the whole benefits by demanding each new arrival speak rudimentary English at the very least, but by demanding higher educational qualifications of each and every aspirant to immigration, Canada is quickly finding itself stuck in the rut of scholars with no place to go and nothing to do. There is frustration and resentment brewing, and it will erupt sometime or the other, not in the faraway future by the hands of the citizen seedlings our Canadian government is so eager to sprout, but by the newly unleashed FOB immigrants themselves. People are not going to wait till tomorrow to fix their ills today.

Immigration quotas are also debatable, I for one am all for it, but know of very many recent immigrants who wish it would close. A part of it would be jealous human nature, but a large part is also based on employment outlook. While jobs are being created with a growing economy, it is painstakingly slow for some, and not at all materializing for others.

I disagree with the statement that healthcare is free in Canada. There is no drug coverage unless you have insurance through your employer, for which you need a to land qualifying job, preferably full-time with benefits. Small business owners (read under 25 employees) rarely have prescription coverage for themselves or their employees. The plan offered by the government for the elderly, that provides low-cost medicines, has substantial requirements, including income guidelines, and substantial waiting lists as well. Sooner or later, “healthcare” – meaning doctors’ and hospital visits - is going to be highly and eventually just subsidized, not free. The “use” of the medical system that many in the cabinet ministry see fit to label “abuse”, is putting too high a “burden” on the “employed” taxpayer. In my experience, professionals with well-paying jobs are the first ones to scream down with free healthcare. Perhaps they want to save on sick days. Prescription drugs are expensive in Canada, just like anywhere else, and the US-based bargain-hunter attitude of “it’s cheaper in Canada, let’s buy it from there” is one motivator in sending drug costs for average Canucks spiraling. In some cases a reverse drain has started in seeking medical services. While seniors from the US will drive all the way to Windsor or Niagara seeking flu shots which their government “forgot” to order in sufficient quantity, Canadian juniors and seniors are increasing looking to the US for cheaper spectacles (no pun intended). In Ontario for example, eye care including eye exams and reduced costs on eyeglasses has been done away with in 2004. One would presume eyes to be a vital part of one’s health. In the US, franchised opticians like America’s Best Contacts and Eyeglasses, offer multiple-year plans that can save a ton of hard currency for the penny-pinching father of five Eskimos. (This was just an example, not a sales pitch).

Canada has a budget surplus, not in small part from the landing fees as some new immigrants may like to think, however that is a fallacy. But how that surplus is being utilized is an intriguing question. There is no comparison to Canada’s ability to think ahead versus the US’s ability to just think. Retirement Savings Plans, the new Canada Education Savings Plans, the tax breaks on saving for and buying a new home, General Sales Tax credits that quite handsomely return part of the 15% sales tax, credits even for the millions of renters, single parents, daycare, childcare, elder care and dependent credits and benefits, all these have been so seamlessly integrated into the Canadian way of life, but still that way of life pales in comparison to the glamorous US, with its dollar purchasing power that I don’t for a second believe will ever achieve parity with the loonie. As for skyrocketing real estate prices, they are not going to burst anytime soon. The bubble may deflate a bit, yes, but all those nouveau riche (should I say fools?) with half a million dollar mortgages for three bedroom condos in Etobikoke are not going to let their prices fall as drastically as other (hopeful fools?) like to think.

I also do not agree that Canada’s educational system is affordable. If you think of the standard of living and earning power there itself, a parent still has to save a considerable amount if they want their child to go to university. Qualifying and applying for loans is being made more difficult, OSAP’s new website is testament to that. And the student loans do need to be returned at some point, otherwise the ever-chasing creditworthiness and dishonorable debt system is always present to track, hunt and maim, just like in the US, so there is no free degree. Plus, education will be a horrible nightmare in the years to come. Today, there are more children entering kindergarten with slim hopes of getting to college than twenty years ago. Every immigrant is encouraged to have more than one child, and they do. While the population is growing, the school system is not. There are not enough schools, colleges and universities put together that will accommodate the number of aspirants to their doors in the next twenty years. That begs the question, where will all that CESP funding go? I can count the number of postgraduate institutions in the whole of Canada on my fingers, I’m willing to bet so can you.

Canada’s emphasis on even hairdryers having certifications, after six-month or preferably year-long sojourns at nameless hairdryer schools accredited by the nation’s leading education advisory bodies, makes sure that even the hamburger has a diploma of some sort. What use it all is, is anyone’s guess. Spurious institutes with official sounding names have sprouted at every strip mall, laying claim to every other reject from the labor market. Right next to the institute you will find a Labour Ready butcher shop with its neon sign always on. They pay by the day, so that’s not all bad. But what does the MD from Bulgaria or the Chartered Accountant from Ghana with three young children that haven’t been fed meat in a month do when he/she can’t find a job willing to accept their fourteen year academic tenures from back home? Work in a steel or glass factory, or a warehouse that ships old clothes to Africa and makes a killing from the latest “western wear”. For every professional employed in their own fields living in shiny houses in Missisauga, there is a fellow immigrant with similar credentials counting pipes in a dingy factory in Ottawa, who is seething. Canada is failing to address that. Just as much as it has failed to address effectively what Canadian cattle ranchers should be doing with their US-designated “mad” cows, and other such political-technicality issues.

Instead of certifying meat, poultry, fish and their resellers, or inspecting the environment in which goods are being bought and sold, and not learning from the SARs scare that shut down half of Ontario’s businesses, the government’s emphasis on improving the nation’s standards by just improving the quality of people it allows into its borders, is falling short of every Canadian’s dream.

I have no more time, but want to end with the reminder that the US is Canada’s largest trading partner. For Canadians, this symbiotic relationship should suffice for never wishing the US to rollover and die.

Just a side note:

A few months ago, the usual pseudo intellectuals that masquerade as wits (Wildean and the not more accurate fractive halves) on up tried to claim that Marxism had nothing to contribute conceptually to capitalism. I immediately asked them to discuss the theory and practice of the dialectic which they promptly dismissed and went back to their discussion of sugarcane measurements.

Recently I found a book just published that discusses relevant applications of Marx`s uncompleted theory. The title included the words dancing and dialectic. Unfortunately, could not find the book title online-but will. In the meantime, found these hits:

http://heapro.oxfordjournals.org/cgi/content/abstract/19/1/115

Re: # 167

Thanks for that Samina. There are a handful of scholars who are revisiting Marxist theory (in Canada). In fact some don`t even consider the infamous experiment of USSR as technically socialist. The divide between socialism/capitalism is artificial and perhaps quite quite unnecessary. Some answers may well lie in integrating these ideas successfully. The field of economics has sidelined Marx. Marx is only talked about it theories of communication and political science. New words for old seems to be the way to go for any serious consideration, since any reference to Marx is so politically charged.

Re: # 168

Saima, you are most welcome. Will let you know book title as I see it again.

RE #168 & #167

Two non-wroking or under-working `feminist ` women, hating capitalist system (where everyone is either motivated or forced to work), trying to re-create a dead ideology, sitting in the capitalist system.

I wonder what is wrong with re-experienting with Socialism, outside North America? It is much like Muslim immigrants, after destroying their countries, coming to Canada to create Sharia systems, to subjugate their women and amputate sinners. What is wrong with creating shariah in pakistan, nigeria, or other muslim countries.

chowk is becoming a comedy place full of lazzy asses pseudo intellectuals.

Re: # 170

freesoul

``chowk is becoming a comedy place full of lazzy asses pseudo intellectuals.``

Where do you fit in this ``place full of lazzy asses pseudo intellectuals``?

pardaisi,

first, its interesting that you should use japan as an example because at the peak of japanese asset bubble, a lot of people were talking the same hogwash about corporate japan that you and a lot of other desis are talking about corporate america right now. so you may want to think of another example such as dow 36,000 or whatever that number was. also fyi, there are some countries in asia, namely taiwan and korea, that are starting to catch up with japan. this is a stunning development when you consider that korea was conquered by japan before wwii and that taiwan did not exist then. i believe pattern will be similar with u.s. i believe living standards for avg american is not going to improve and will probably decline and that some countries will catch up with the u.s.

second, i was not trying to insinuate equivalence between economies by comparing s&p 500 with emerging asia. rather i was just pointing out that there is nothing special about corporate america. those graphs were simply to illustrate this point. and as the graph clearly shows, relative to expectations, companies in emerging asia have performed much better than large cap companies in the u.s. i believe this will be case going forward.

third, your point about markets being out of whack for a five year period is incorrect. markets may get out of line for a couple of years but in the longer term they reflect reality. run up in nikkei 225 was only for a two year period (1987-1989). by the middle of 1990, that market had returned to normal level. pattern was very similar for the nasdaq bubble which lasted less than two years.

fourth, in the last ten years, s&p 500 has risen by aprroximately 7% p.a. which is not spectacular by any means. index is also trading at 18x trailing earnings which is still expensive in my opinion especial when you compare it to the rest of the world.

to repeat the claims i made in an earlier post, i dont think u.s. is going to be the big dog that it was for the period after wwii. for me that time cannot come soon enough.

Re: # 156

Pardesi:

There is one other aspect that needs to be mentioned. Being aware of the issues is one thing. Taking appropriate measures is another point. Even if you take appropriate measures, there is no guarantee or 100% security that the measure will be all encompassing. Long time ago, a wise man told me, ``There is no such thing as security in anything in life, career and other aspects. The only security you have is in yourself.`` That was a time when I was making some changes in my life. As an optimist, I wanted to hear and see the positive picture. Initially, it was a struggle to absorb the message but later on it flowed smoothly and came naturally. It was a different approach and thought process that opened many avenues. I guess that is the beauty of embracing any change.

While we are on the subject, can I request you to drop off the Jees or Gs after my first name? Rest assured, I will survive :)

Happy Thanksgiving!

interesting article on the nature of post-2001 recession economic growth in the u.s. however the credentials of the author of the report cited in the article seem questionable:

http://www.nytimes.com/2005/11/20/business/yourmoney/20view.html?pagewanted=print

As the McMansions Go, So Goes Job Growth

THERE`S a growing consensus that the housing market is cooling off...

...But in recent years, housing, real estate and the related industries have become a huge factor in another crucial economic area: employment growth.

After the brief and shallow recession of 2001, the resilient United States economy stubbornly failed to create payroll jobs at the rate of past recoveries. Economists and politicians blamed factors and trends like outsourcing, global trade, high benefit costs and productivity growth. But amid the gloom, the real estate sector shouldered the burden of job creation.

Asha Bangalore, an economist at Northern Trust in Chicago, tallied figures from the Bureau of Labor Statistics for sectors like construction, building material and garden supply stores. She found that from November 2001 to October 2005, housing and real estate accounted for a whopping 36 percent of private-sector payroll job growth. ``In four years, 2.3 million private-sector jobs were created in the U.S., and 836,000 were related to the housing sector,`` she said.

...As a result of the boom, the economy is more concentrated on housing than ever before. ``Residential investment as a share of gross domestic product is at the highest level in 50 years,`` said Jan Hatzius, senior economist at Goldman, Sachs.

Re: # 173

``There is no such thing as security in anything in life, career and other aspects. The only security you have is in yourself.``

What a refreshing thought !

The problem with US is not that our social security system is weak. The problem is that it is too much strong. Everytime I see North Orleans victims given payshecks to stay in hotels and get new mobile houses, my blood boilds. And then the democrats want increase in medicad. On top of that, the neocons think they can spend 400 billion dollars to impose democracy in stupid civilizations like Iraq`s. the budget deficit runs in trillions in just few years.

One more point is that we should not compare American economy with Asians on just size and volume basis. There is a field called creativity and innovation, in which USA leads and others follow. It does not matter where an idea gets packaged into product, but it matters how and where this idea is conceived, and which society rewards it the most.

Re: # 175

So, freesoul, where do you fit in this ``place full of lazzy asses pseudo intellectuals``?