I think the answer lies chiefly in the American psyche. Until we feel that things are finally improving and we can spend our money safely (and have the capacity to secure credit) to pay for the new basement or the refurbished kitchen, the new car or new house, this economy will improve painfully slow.
Who and what circumstances will bring us to that point, I don't know. Perhaps a Ronadl Reagan type who can rallly the troops, combined with a master politician that can artfully negotiate the Washington landscape to deal with the country's debt without putting us back into recession.
Re: i hear you
Dex
12/2/2011 12:32:40 AM
Well Scott aren't you glad we think you are that smart?
Heck, if I knew the answer to that, I'd be in Omaha toasting Cherry Cokes with Warren B. Is anybody that smart?
Re: i hear you
Broadway
12/1/2011 8:44:53 PM
Scott: When will this long slow deleveraging process end and the goodness of the subsequent two decades begin?
Debt deleveraging is a long, slow, painful progress. The good news is once it is done hopefully attitudes and balance sheets will be in shape for a much more sustainable economy. And given that the stock market has been sub-par for the last 15 years or so, it will set the stage for good growth over the next 10-20 years.
The positive side of the slow recovery is: Market will give us a super long time frame to scoop solid, well running companies at reasonable price. It is a happy time for true value investors
Re: i hear you
PAW
12/1/2011 10:44:56 AM
As people delay purchasing new cars, repairs on their existing car are likely to increase. That is fine as long as the repair bills are less than what would be a monthly new car payment. It is true that car parts and repair shops do better when we keep our old cars longer. Let's hope, for their sake, that there is not a nother "cash for clunkers" program....that will likely put them out of business.
Re: i hear you
tokyogai
12/1/2011 10:15:46 AM
Maybe it means we should change investing to reflect the new normal. Repair shops seem to be a good bet as well as makers of replacement parts.
I just put $500 for brake calibers on my Jeep Liberty, which after about 4 years has nearly 105,000 miles. Crossing my fingers and waiting till the payments expire before trading it in for a new one.
Re: i hear you
Tenacious
12/1/2011 8:29:05 AM
It's interesting, as you mention, that we have more repairs now because we tend to keep the cars longer. But I think overall it pays off -- weigh the repair costs against the monthly payment on a new car.
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