Transcript
July 2010 Part 1July 2010 Part 1
TechVest
Long Term Outlook: An Long Term Outlook: An Abyss.Abyss.
Stagnation for now.Stagnation for now.
TechVest
Apple – The Minority Reaps Majority ProfitsApple – The Minority Reaps Majority Profits
TechVest
The Job Recession – Deeper and The Job Recession – Deeper and WiderWider
TechVest
MismanagementMismanagement
Collapsing Collapsing the Private Economythe Private Economy
TechVest
Government Jobs are NOT Government Jobs are NOT “Productive”“Productive”
BASIC ECONOMICS
Even where government jobs pay taxes, the original bill has to have been paid from other taxes.
This is called “leakage” … ~70% reduces the supply of Private Savings in favor of government net spending. Leakage also reduces velocity of proper re-investment.
As productive (Profitable) as a private economy may be, government jobs will leak the lifeblood out of the system.
Military ? Police ? Fire ? Medical Emergency ? Research ?… are those activities multipliers of the economy ?
TechVest
Government Deficits “Eat” Private Government Deficits “Eat” Private SurplusSurplus
TechVest
‘ ‘09 Government Debt still not net 09 Government Debt still not net increaseincrease
TechVest
But Govt Growth Inverts Long Term But Govt Growth Inverts Long Term GDPGDP
Simply: as government spending has gone up, economic growth has gone down.
TechVest
Government Spending Out of ControlGovernment Spending Out of Control
TechVest
Spending Freezes Will Not Regain Spending Freezes Will Not Regain ControlControl
TechVest
Health Spending Gobbling Up the Health Spending Gobbling Up the Economy ?Economy ?
TechVest
Commercial Real Estate in the Commercial Real Estate in the TankTank
TechVest
Commercial Delinquencies Triple in 12 Commercial Delinquencies Triple in 12 mosmos
TechVest
Plans to Buy New Homes Near All-Time Plans to Buy New Homes Near All-Time LowLow
TechVest
Government will Crowd Out Private Government will Crowd Out Private SectorSector
TechVest
Private Sector Took Another Dive Private Sector Took Another Dive RecentlyRecently
TechVest
22 Private Sector Losing for a Decade Private Sector Losing for a Decade ……
Bara
ck O
bam
a
TechVest
The The Somewhat Somewhat Good (Flat) Good (Flat) NewsNews
TechVest
Where is this ? This is Where is this ? This is China.China.
TechVest
Interest Rates may be “dead” for a Interest Rates may be “dead” for a WhileWhile
TechVest
We are now following Hi-Debt Japan We are now following Hi-Debt Japan CurveCurve
TechVest
Stagnation Despite Hi-Liquid Low Stagnation Despite Hi-Liquid Low Interest Interest
TechVest
~450k Weekly Jobless Claim ~450k Weekly Jobless Claim StagnationStagnation
TechVest
Unemployment Duration - Ridiculous Unemployment Duration - Ridiculous HighsHighs
TechVest
Sharp Economic Interrupt late Sharp Economic Interrupt late May ?May ?
TechVest
New Taxes New Taxes Will Will DisperseDispersethe Private the Private EconomyEconomy
TechVest
Hollowing Out of America’s Comfort Hollowing Out of America’s Comfort ZonesZones
TechVest
Fed Tax 2011 Current Likely Max Possible~ Maximum Impact per $1m Profit
Estate Tax 0 55 55 ?
Dividend Tax 15 20 39.5 -$50,000
Cap Gains 15 20 39.5 -$250,000200+ Income
Rate 35 39.5 44.9 -$150,000
MediCare Tax 0 3.8 3.8 -$38,000SSA 7.5%
Max 72k 150k No limit -$75,000
Net VAT Tax 0 1% 5% -$50,000Health Tax
/empl. 0 750 2000 -$2,000 ea
Inflation 4% 6% 10% -$300,000
Dollar Value PPP 100 90 80 -$100,000Gasoline Increase $3 $4 $5 -$20,000
EPA CO2 Tax 0 1% 2% -$20,000Deductions Reduction 1% 3% 5% -$50,000
Small-Biz Tax Increases: Wipe-Out of any Typical $1m Profit
Maybe not
July 2010 Part 2July 2010 Part 2
TechVest
Long Term Outlook: An Long Term Outlook: An Abyss.Abyss.
Stagnation has Stagnation has OpportunitiesOpportunities
TechVest
AnyAnyGood Good News ?News ?
TechVest
Entrepreneurism Rise Highest in 14 Entrepreneurism Rise Highest in 14 YearsYears
TechVest
Probability of a Second Recession is Probability of a Second Recession is Zero ?Zero ?
TechVest
Probability of Near-Term Inflation is Probability of Near-Term Inflation is Zero ?Zero ?
TechVest
Employment Trends Might Turn in Employment Trends Might Turn in 20112011
TechVest
Is this level of Productivity Growth Is this level of Productivity Growth Good?Good?
TechVest
Labor Force Growth – Good for the Labor Force Growth – Good for the USAUSA
… IF there are jobs
TechVest
What to What to Do ?Do ?
TechVest
Business will have to Finance Business will have to Finance “Internally”“Internally”
BASIC DELEVERAGING TRENDS
If a business cannot charge monthly, customers will go to vendors that can (The XaaS Auto Industry Model).
Customers have no more debt capacity, therefore financing games become history and only the creditworthy can buy.
Vendors have to “make” their customers creditworthy by shouldering the burden themselves (the Government Model).
Cost reduction is the sole survival strategy where prices are in deflation while some component costs inflate (Stagflation).
International trade is about to get brutal. Source locally.
TechVest
END ?END ?
top related