The economic impact of the current Exodus from the United States.

Quote from TraderZones:

If illegal immigrants leave, that is a good thing. They don't belong here in the first place. I am sure the Brazilian government and people both welcome ILLEGAL immigrants with open arms. You can have ours.
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I am not sure why but this made me think of a joke I read recently:
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Mexican Earthquake

A big earthquake with the strength of 8.1 on the Richter scale hits Mexico.

Two million Mexicans have died and over a million are injured. The

country is totally ruined and the government doesn't know where to start with asking for help to rebuild. The rest of the world is in shock.

Canada is sending troopers to help the Mexican army control the riots.

Saudi Arabia is sending oil.

Other Latin American countries are sending supplies.

The European community (except France) is sending food and money.

The United States, not to be outdone, is sending two million Mexicans to replace the dead ones.


God bless America!!!!
 
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Maverickz: This leads me to believe that Brazil just has a LOT more criminals walking the streets...YAY Brazil.


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April 6, 2008

SouthAmerica: Wrong conclusion as usual.

The United States during the period 1910 to 1970 had a prison population from 200 thousand to 300 thousand people. During that time the US went through two World Wars, and a Great Depression.

Then the nation got very "Dumb" starting in the early 1970’s when they adopted the “Brain Dead” policies and since then the United States prison population has exploded from 300 thousand people to the current 2.2 million people.

The actual US expenditures of the United States regarding its prison systems it is a lot larger when you take in consideration all the other prisons that the US has around the world including in Iraq, in Guantanamo Bay, in Afghanistan, and all the other illegal prisons that the US has in other countries – and the total number of prisoners must be over 3 million people when everything is taken in consideration.

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Quote from southamerica:

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Maverickz: This leads me to believe that Brazil just has a LOT more criminals walking the streets...YAY Brazil.


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April 6, 2008

SouthAmerica: Wrong conclusion as usual.

The United States during the period 1910 to 1970 had a prison population from 200 thousand to 300 thousand people. During that time the US went through two World Wars, and a Great Depression.

Then the nation got very "Dumb" starting in the early 1970’s when they adopted the “Brain Dead” policies and since then the United States prison population has exploded from 300 thousand people to the current 2.2 million people.

The actual US expenditures of the United States regarding its prison systems it is a lot larger when you take in consideration all the other prisons that the US has around the world including in Iraq, in Guantanamo Bay, in Afghanistan, and all the other illegal prisons that the US has in other countries – and the total number of prisoners must be over 3 million people when everything is taken in consideration.

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A large part of that difference is how the US and Brazil treat drug users. In the US possession of a controlled substance (drugs) is a crime and you will get a prison sentence for it. In Brazil posession will get you community service and/or in a treatment program if the person was an addict. Considering that MOST of the people in US prisions are there for drug related crimes this means our druggies are in prision and Brazil druggies are doing community service and living next door to you.
 
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Maverickz: A large part of that difference is how the US and Brazil treat drug users. In the US possession of a controlled substance (drugs) is a crime and you will get a prison sentence for it. In Brazil possession will get you community service and/or in a treatment program if the person was an addict. Considering that MOST of the people in US prisons are there for drug related crimes this means our druggies are in prison and Brazil druggies are doing community service and living next door to you.


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April 7, 2008

SouthAmerica: Most countries around the world use common sense and people are punished with community service and/or in a treatment program if the person was an addict. Most countries around the world have better things to do with their scarce resources than incarcerate millions of people as the US has been doing for the last 35 years.

You said: “Considering that MOST of the people in US prisons are there for drug related crimes this means our druggies are in prison and Brazil druggies are doing community service and living next door to you.”

Most druggies are not in prison in the United States, they are all around us on our daily lives. If all these people who are junkies in the US were in prison then the US would have over 25 million people in prison instead of only 2.2 million.

In 2006, an estimated 20.4 million Americans aged 12 or older were current illicit drug users according to the latest information from the National Survey on Drug Use & Health.

These are the people who were honest about their answers regarding the US government survey – probably the real number of illicit drug users are much higher – at least 10 percent of the population on the United States are illicit drug junkies.

If you add on top of that the millions of legal drug junkies in the United States then you have a nation that at least 30 percent of the population is spaced out most of the time (they take legal prescription drugs similar to illegal drugs or the actual illegal drugs.)

The United States is the world's largest consumer of cocaine, shipped from Colombia through Mexico and the Caribbean; consumer of ecstasy and of Mexican heroin, marijuana and methamphetamine; minor consumer of high-quality Southeast Asian heroin; illicit producer of cannabis, marijuana, depressants, stimulants, hallucinogens, and methamphetamine. (According to the CIA 2007 World Factbook)

When my second book was published in 1999 “The Real Promised Land” I had a chapter about the prison system in the United States (that chapter is about 80 pages long) with all kinds of information about the US prison system. On that chapter I also had some information about the illegal drug trade in the United States. Here I am quoting from that book as follows:

“One of our major newspapers in New Jersey on May 31, 1998 had the entire front page of the newspaper plus a whole section dedicated to an article about "Dirty Money", drug money and money laundering. They explained in detail how money laundering works with pictures and diagrams. They even tell you that 44 pounds (20 kilos) of cocaine has a market value of $ 1 million dollar and that $ 1 million dollar in $ 10 dollar bills weight 220 lbs.

This very long article "Dirty Money" it was followed by a series of articles on the same subject on the following days. These articles gave us some useful information regarding the illegal drug market in the United States such as; "...Nationwide, this marketing apparatus disposes of an estimated 60 percent of the world's illegal drug supply, as much as 600 tons of cocaine alone, and generates about $ 57 billion a year in profits." (Since "The Record" is a major newspaper in New Jersey, I assumed that the figures that they presented in these articles were accurate.)

This information can give you a better perspective of what I am writing about. It will help you to understand why there's an unlimited supply of risk takers to deliver illegal drugs to the market place. This people also have the incentive to increase their market base, as much as they can, around the country to increase the demand for their product. The main incentive for this whole process to work is money and profits. It is very profitable to deal in illegal drugs.

To put things under the right perspective I am listing the ten largest corporations in the United States as ranked by the "Fortune 500" magazine issue published in 1998 accordingly to their revenue and profits as follows:

(in millions of Dollars)
CORPORATION NAME…REVENUES…..PROFITS

1) General Motors……$ 178,174……..$ 6,698
2) Ford Motor…………….153,627…….....6,920
3) Exxon……………………..122,379……….8,460
4) Wal-Mart Stores…….119,299……….3,526
5) General Electric…….…90,840……….8,203
6) IBM…………..….…………78,508……….6,093
7) Chrysler…………………..61,147……….2,805
8) Mobil………………………..59,978……….3,272
9) Philip Morris……………..56,114……….6,310
10) AT&T……………….…….53,261……….4,638
------------------------------------------------------------------------
TOTALS………….………..$ 973,327….$ 56,925
...........................========= ========

According to the "Fortune 500" the ten largest corporations in the United States had a combined revenues of $ 973 billion dollars and profits of $ 57 billion dollars in 1997.

The sales of illegal drugs in the United States generated profits of $ 57 billion dollars in 1997. The profit generated by the illegal drugs is equivalent to the total combined profit generated in the United States by its ten largest corporations. The profits generated by General Motors, Ford Motor and Exxon are petty cash when compared with the profits generated by the illegal drug industry. I hope that even the most simple minded people in the United States can understand that the illegal drugs market is about profits and not about a habit forming substance. It is capitalism working in its most efficient manner.

…I hope the above information gives you a new understanding of why the United States can put 10 million people in prison because of its war on drugs, and that will not make a difference in the amount of drugs sold in the United States. The illegal drugs will be there to meet the market demand.

The tougher the government gets in the war against illegal drugs the more profitable that market becomes and the more people will be willing to take a chance on selling illegal drugs to get a piece of the profits of that pie.

This might be a surprise to some people, but there is so much profit in trading in illegal drugs that some players are willing to kill or take the risk of getting kill in the process of trying to get a piece of that profitable pie.”

Source: Book “The Real Promised Land”


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Here is another article about the United States and illegal drugs.


A nation of "Junkies"?
By: L.J. White
April 7, 2008

Americans probably "Fired Up" more “Joints" than consumed Mac Donald's and Burger King hamburgers combined.

Ounce per ounce alcohol consumption surpasses bottled water. Cocaine is like a "Blizzard" covering even in the southernmost states. Billions of taxpayers dollars are spent every year in an attempt to eradicate the problem, while more than likely double the amount of money is made by "Drug Lords" and "Pushers".

The illegal cash is used for more drug production, perhaps terrorist activities and certainly other illicit ventures. Meantime countless lives are lost in the so-called "Drug Wars", including innocent people and law enforcement officers. American families are being devastated by the addiction regardless of financial status, education or religious denomination.

Children of elementary school age are being approached by pushers and turned into "Junkies". This problem of immense proportion and catastrophic consequences seems impossible to bring to an end. Are the tremendous effort and money spent by the US Government to stop Drug Traffic and consumption paying off? Is the end in sight? Are there better ways to end this horrifying situation affecting a large segment of the American population?

In order to have steady lucrative supply there has to be a demand first. It is obvious that American demand for illegal drugs climbed sharply since the early to mid sixties. The Government budget allocated to combat the problem also rose sharply over the same period. This leads to larger profits for the "Drug Lords" and their "Puppets".

…Even at corporate levels, companies are being embezzled, as high-ranking corporate officers become addicted, Government officials of all branches are not exempt. The use of narcotics is widespread also under publicized.

Financial organizations, government officials, private industries among others are getting involved in the lucrative business of "Illegal Drug Trafficking", further adding to the spiraling problem. Is there a realistic answer that offers a foreseeable end to the drug problem?

You can read the entire article at:

http://www.revistainterforum.com/english/articles/otherside_junkies.html

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Southamerica your patriotism is commendable but there is a limit to how much you can stretch it before it wears thin. You can go on and on saying why Brazil is such a great place but simple fact is most people would rather live in the US than Brazil.

Is the US seemingly headed in the wrong direction? Is Brazil on a better track than it was before? Apparently. But one should not delight in the US's travails, it is a country that has shown the ability to lead and has done so well. The world is a much more dangerous place with it weakened. Who would you have lead in its place? China? Brazil? No neighbor of China is entirely comfortable with it as it has had harsh words or a war with virtually all the powers around it in the past century. Brazil hasn't been as combative but it's beneficial presence to its neighbors isn't exactly obvious either.
 
Hmm where is Brazil?

ODA

Flows of official financing administered with the promotion of the economic development and welfare of developing countries as the main objective, and which are concessional in character with a grant element of at least 25 percent (using a fixed 10 percent rate of discount). By convention, ODA flows comprise contributions of donor government agencies, at all levels, to developing countries (“bilateral ODA”) and to multilateral institutions. ODA receipts comprise disbursements by bilateral donors and multilateral institutions.
 

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Quote from southamerica:

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April 3, 2008

SouthAmerica: The Exodus from the United States continues and it is slowly snowballing.

Last Saturday a friend of ours came for diner at our house. These is a couple who used to live here in Bergen County, New Jersey since the mid-1960’s, then they moved to Miami about ten years ago, but some of their sons still live on our area and they visit them on a regular basis.

She was telling me that her grandson who also live in Miami with his father is very depressed because all his friends have moved to Brazil. All his father friends have moved back to Brazil in the last few years and there is nobody left in the area.

She also told me that about ten years ago in downtown Miami they had a major shopping center with mostly Brazilian stores, not only the shopping center but many of the businesses in the area belonged to Brazilians including restaurants, real estate offices, bakeries, and so on. Today the shopping center is closed and most of the businesses in the entire area are gone. It looks like one of these ghosts towns that they have in the middle of nowhere that were abandoned decades ago.
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uh, what does this have to do with trading?, and

what did these people have to do with trading, if anything at all?, or in other words (IOW) why should we care?, or more politely, why is this thread on this forum or on ET?

so, were these ethnic Brazilians who moved from NJ, to FL, and then home again?

with all the increases in Brazil and stabilization in so many areas of their economy, is it any wonder?

so, what are we as traders on ET supposed to do?, move to Brazil?

hey, we all feel your pain, its evident in your words, but these are no different from the other sociological demographic studies that show that those who have moved from their origins usually attempt to return with their wealth or success. So, IOW, these trends are to be expected and nothing new.
 
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Limitdown: uh, what does this have to do with trading?, and what did these people have to do with trading, if anything at all?, or in other words (IOW) why should we care?, or more politely, why is this thread on this forum or on ET?


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April 7, 2008

SouthAmerica: Years ago one of the foremost experts on real estate in the United States it was the economist Dr. Jack Lessinger. I remember reading one of his books more than 15 years ago – “Penturbia.”

In that book he gave a full analysis of the real estate market in the entire country, county by county.

There is one fact that I remember that he mentioned on his book – that the real estate market in the New York Metropolitan area, in the Los Angeles Metropolitan area, and in the Miami Metropolitan area were at least 50 percent above the price that was justified in economic terms. Rentals were inflated as well.

He said that the main reason for the real estate price inflation on these 3 markets was Immigrants. If it wasn’t for the high volume of immigrants moving to these areas the rentals, and real estate prices would be at least 50 percent lower.

That is the only information that I remember after reading that book many years ago, I never forgot what he said on the book about the impact that immigration, legal and illegal, has on the value of local real estate.

Since the late 1980’s and early 1990’s when he compiled his research for his book we had an explosion of immigration to the United States of legal and illegal immigrants, and that it has affected the price of real estate in other Metropolitan areas as well such as in the Boston area, Chicago and so on…

Now we have reverse immigration – now we have an EXODUS of immigrants, legal and illegal, leaving the country for one reason or another resulting on a profound economic impact in many areas of the country.


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“Penturbia” by Jack Lessinger, Ph.D – published in 1991.

Penturbia is a name created by Jack Lessinger, Ph.D., a now retired Professor and Emeritus Professor of Real Estate and Urban Development at the University of Washington (state).

Dr. Lessinger has applied the name "Penturbia" to certain counties most likely to experience significant property value increases in the next 20 years. By analyzing U. S. Census and other population data from 1790 through 1995, he has identified four previous migrations as the United States was settled. The current migration is to the fifth region of opportunity, hence the name Pent-Urbia.


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In 2003, Jack Lessinger published an article: “Another Great Depression?” and he said the following on that article:

Another Great Depression?
By: Jack Lessinger

The economy is drifting into uncharted and dangerous seas. In Japan, second largest economy in the world, an epidemic of deflation is already well advanced. In America, except for energy and the imponderables of the Iraq War, deflation is beginning to curtail profits, investments and employment.

Like many other respected economists, Paul Krugman sees little threat. Krugman's solution for deflation is simple: Print carloads of money. In the ensuing inflation, loans would be repaid with cheaper dollars. Increased borrowing and spending would revive the economy. Ben S. Bernanke, newest member of the Federal Reserve Board of Governors, has suggested much the same solution in the event of a full-fledged U.S. deflation.

The Krugman-Bernanke scheme is perfectly consistent with accepted economic doctrine. But it is hopelessly naïve. My research on complex interactions between the society and economy of the U.S. since 1790 suggests that deflation and inflation cannot be toggled by clicking on an economic switch. Price levels depend on social variables as well as economic. (Schizomania, 2003.)

The last sustained deflation initiated the Great Depression of the '30s. In the first four years, prices plunged 25 percent. Invisible to economists, a sweeping transformation of society had come to a critical phase. Two American Dreams were ranged against each other, one old and in decline, the other young and rising.

The old vision had ruled America since 1845. Dreaming of a powerful industrial nation, our great grandfathers saved every nickel for investment in railroads, mines and factories. By the '30s, however, relentless saving, investing and the building of heavy industrial capacity had become unprofitable.

Around 1900, an opposing vision slowly began to overlap the old one: It urged Americans to forget about saving and investing, Live for today, not tomorrow.. Spend. Borrow. Consume. Old-timers bitterly opposed the new ideas. In their view it was scandalous to spend hard-earned capital on consumer frivolities.

By the '20s, America was split in two. One society-and-economy was wedded to a stern past, the other to a permissive future. One was clad in the bustles and proprieties of 1900, the other in short skirts, danced a jazzy Charleston.

In the '30s, the two Americas were like heavyweights slugging each other into oblivion. Laws and preferences that shored up one, injured the other. Deflation resulted from an excessive supply of "old" goods and services, and an inadequate demand for both the "new" and "old."

The new consumption economy would not bring full employment until demand for consumption could be expanded by new social and political forces, as well as by a larger and more enticing range of consumer goods and services. To enlarge both demand and supply, new technologies had to be invented and promoted. A steep learning curve lay ahead.

· Mass purchasing power had to multiply. That required leveling the sharp inequality inherited from the previous century. Now, to stimulate spending, dollars had to be put in the hands of those least able to save - the poor.

· To raise wages, union-haters had to become union supporters. Rabid conservatives had to reverse their views and vote for progressive income taxes and government spending on social programs.

· The new vision commanding us to get it all NOW had to be propagated by novelists, movie makers, editorials, reporters, legislators, advertisers, innovators in every field.

· Houses and cars would become the prime consumer products of the new society-and-economy. Both depended on the invention of suburbia, new city of consumption spending and parking lots. Without a car, living in suburbia was unthinkable. Without suburbia, cars would have been unnecessary.

· But suburbia was slow in coming. William J. Levitt was still too young to have that gleam in his eye.

No wonder the Great Depression lasted so long and was ended only by the most brutal war in history. Now fast forward to 2003.

Today's sluggish economy is rooted in another transformation that began in the '60s. That's when the new vision became a raging mania to consume, when it began to create accelerating excesses-consumer debts, government deficits, pollution, ecological hazards, myriad irresponsibilities threatening our very existence. Now, an opposing vision was born - of a community-oriented, sustainable, environmentally sound and responsible world order.

In the early 21st century, the old consumer society and economy is losing its hold. Deflation will be due to an oversupply of cars, houses and other non-productive goods, as well as by a deficiency of demand for both "old" and "new" goods and services. Economic activity will be slowed by conflict between the two opposing visions.

Eventually the new one will prevail. But not until it surmounts a steep learning curve. Meanwhile, Krugman and Bernanke may have to face the reality of a new Great Depression.

(Jack Lessinger is Professor Emeritus, Business, Government and Society, Graduate School of Business, University of Washington. His latest book is SCHIZOMANIA: Split Society, Perilous Economy 1990-2020.


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Jack Lessinger's vision of America's future
Schizomania

It’s perhaps a bit out of character for Independence Journal to write a book report, but there are darned few books around that give such a clear set of economic boundaries for our future freedoms as Jack Lessinger’s new book Schizomania.

Lessinger, now professor emeritus of business and history from the University of Washington is no newcomer to the writing game. His book Penturbia, published a dozen years ago has been a classic text that accurately forecast the rise of the land beyond suburbia. Driven by the Internet, UPS, and the whole notion of ubiquitous data access embodied in wireless communications, along with Bill Gate’s vision of .NET™, it’s now possible for businesses to exist almost anywhere.

But let’s not get ahead of the story. Lessinger begins the first couple of chapters of Schizomania by describing what he classifies as two paradigms – or ruling manias – that run our world today.

The existing paradigm, the dominant one, had its roots in the big cities that resulted from industrialization and led to mass consumption. Mass consumption, in turn, spawned the modern suburbs. But in Lessinger’s view, the suburb is in serious trouble. So much so that we should not be surprised to see suburban housing prices fall 50% or more, in real terms, within the next 10 years.

The new paradigm, emerging since the Haight-Ashbury days of the 1960’s, is the opposite of mass consumerism. The new paradigm is worried about environmental issues, long-term sustainable economics, paring down debt, and most important of all, it’s casting off the yoke of consumerism.

He predicts a decade long showdown between consumerism on the one hand – promoting the old mass consumption paradigm – and the Responsible Villager paradigm of thrift and debt free living on the other.

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Limitdown: so, what are we as traders on ET supposed to do?, move to Brazil?


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April 7, 2008

SouthAmerica: I used the Brazilian Exodus just to show an actual trend that it is underway which includes many people that I know.

This thread is not about a pissing contest between Brazil and the United States it is about the economic impact that this large exodus of people is going to have on communities around the country – and this exodus it will have a major negative impact on the prices of real estate in many areas where these people used to live – as renters or owners of property.

The enclosed article published today on the Financial Times shows the importance of real estate has on the economy, and the article said: “But the IMF's fundamental analysis is correct. The residential property market drives the business cycle.”

I guess some traders have not grasped as yet that the mess caused by the subprime scandal it has generated billions of dollars of losses around the world – and that if the Federal Reserve had not bailout Bear Stearns the stock market probably would be down by at least another 2,000 points by now. And the trading environment that the traders would be working today it would be a lot more negative with the entire system feeding on itself and imploding.

You guys on Wall Street have to thank Ben Bernanke to place a floor on your losses.

Maybe you guys in Wall Street can start commemorating St. Bernanke Day to commemorate – the patron saint whom bailout bad and bankrupt businesses and reward mediocrity.


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“Central banks must start to care about house prices”
By Wolfgang Munchau
Published: April 7, 2008
Financial Times - UK

The International Monetary Fund last week gave central banks some wicked advice*. They should no longer ignore residential property prices when setting interest rates. At the same time, the IMF recommends central banks should retain their inflation-targeting frameworks. It all sounds very plausible. Unfortunately the two goals are inconsistent.

The reason why central bankers in the past refused to take explicit account of property and other asset prices is not accidental. The New Keynesian forecasting models, with which central banks predict future output and inflation, have no explicit role for money, financial markets and asset prices. The way modern central banks deal with asset price bubbles is to do nothing until they burst and then clean up the mess. For the New Keynesian framework to work well, a narrow inflation measure is not a design error. It is essential.

The problem is that you cannot just shove an asset price formula into the model. Of course, central banks can always try "interpreting existing mandates more flexibly", as the IMF put it - or lie about your policy. The IMF approvingly cites the case of the Swedish Riksbank, which had persistently undershot its inflation target from 2004 until 2006, yet refused to cut interest rates. The Riksbank was concerned about the country's property bubble at the time. I think the Riksbank had a point.

But it was dishonest to pretend that it was an inflation targeter at a time when it clearly was not. It was happy to let inflation fall outside the target rate for a prolonged period. The whole point about direct inflation targeting is to stick to your target in adverse circumstances so you can stabilise inflationary expectations. When you worry about inflation this year and the Stockholm property market the next, people become confused. Worse, the two targets often require opposite action. For example, during the credit and housing bubble, asset prices were rising but inflation was low. Now inflation is rising and asset prices are falling. So what do you do?

But the IMF's fundamental analysis is correct. The residential property market drives the business cycle. The more liberal a country's mortgage market, the greater the influence of housing on the economic cycle and the greater the influence of monetary policy on house prices.

The IMF ranks various countries according to a metric of mortgage market liberalism, with the US on top and Germany, France and Italy near the bottom, as one would expect. The metric is made up of several factors, including typical loan-to-value ratios.

The UK and especially Spain are ranked surprisingly low, which I find implausible. I would rate the UK property market as among the most susceptible to a downturn in the credit cycle. For example, last week UK mortgage lenders caused near-panic by withdrawing popular 100 per cent mortgages for first-time buyers. At a time of vastly inflated property prices, first-time buyers will now have to save money up front. Maximum 90 per cent mortgages in a stagnating or falling market could easily lead to falling demand.

So what should a central bank do? It should seek to stabilise a broad price index, which should include not only oil and food but also a realistic measure of property prices. By this I do not mean a rental component but some element of the residential property market itself. In the UK, the all-items retail price index is one such measure (since it includes mortgages). I know that broad inflation indices are annoying from a central bank's perspective. Those indices do not react well to policy action. But the goal of monetary policy surely cannot be to make life easy for central bankers.

I suspect the New Keynesian policy framework will go down in the history of rules-based monetary policy frameworks as a fair-weather construction that worked as long as global inflation was low. Now that inflationary pressures are rising and asset prices are falling, the only way central banks can avoid a calamity is either by abandoning single-minded core inflation targeting - or by deceit.

*The Changing Housing Cycle and the Implications for Monetary Policy, chapter 3, IMF World Economic Outlook, April 2008; www.imf.org

Source: http://www.ft.com/cms/s/0/238836d8-043a-11dd-b28b-000077b07658.html?nclick_check=1

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SouthAmerica: Most countries around the world use common sense and people are punished with community service and/or in a treatment program if the person was an addict.

And result of this common sense in Brazil. War between gangs and police for control of the communities.
 
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