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The Dow Jones has esentially been stagnant for 6 years now, not just for one year. This is a clear sign that despite all the cheerleading of the administration, there is some awareness in the markets that the prospects for companies, despite their capturing a record share of GDP in profits, are not so great - and that's because, in the medium term, that depends on consumption, and consumption in the US is going nowhere, with stagnant wages, record levels of debt, and the coming disappearance of house equity withdrawals.

In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Wed Jan 18th, 2006 at 08:43:03 AM EST
The six-year picture worries me less than the one-year picture.  Recessions happen.  But a stagnant market only three years into an expansion?  Not good.

Conservatives want live babies so they can raise them to be dead soldiers. - George Carlin
by Drew J Jones (myfriends@thisispancakes.com) on Wed Jan 18th, 2006 at 08:49:35 AM EST
[ Parent ]
This "expansion" was driven by the FED's loose monetary policy.  Any fool can make money when in a negative interest rate environment - and thus the 'increase' in GDP.

Looking at the microeconomic situation I see a continued deterioration of the US economic position.  The automobile industries, the aeronautical industries, computer industries, and pharmaceutical/bio-tech industries are all experiencing a declining financial position as illustrated by downgrades of their bond ratings.  

by ATinNM on Wed Jan 18th, 2006 at 10:04:15 AM EST
[ Parent ]
The American auto industry has been doomed since the '70s.  Twice now they've been caught by high gas prices and received a pounding from consumers.  Once the Japanese entered the market with infinitely-better cars, it was all over.  They can't innovate, and they're losing money.  A lot of people over at Daily Kos believe we should, once again, engage in the "Buy American" campaign.  I have no sympathy for that, as someone who (knowing gas prices would be higher in the future) bought a Honda Civic when I was sixteen.

The management is incompetent, and the union leaders allowed it to happen when they should've demanded that GM and Ford (but especially GM) engage the hybrid side of automobiles.  Everyone in the American car industry is a fuck-up, as far as I'm concerned.  Anyone could've predicted this, knowing that competition for oil would pick up as China and India (among others) continued to rise, and that, consequently, the price would rise.

As far as technology is concerned, I see America losing a bit of its edge in biotech, but generally maintaining strength in computers.  Two companies control over 95% of the operating systems market (Apple with about 5-6%, and Microsoft with about 90%).  There's very little room to fight there, and it's going to be a century before any company can even think of ripping away Microsoft's near-monopoly.  Now, on the actual boxes (Dell, HP, Sony, etc.), other countries will be able to compete.

I'd like to think we can find a better industry leader than Dell, but I'm a partisan. ;)

Conservatives want live babies so they can raise them to be dead soldiers. - George Carlin

by Drew J Jones (myfriends@thisispancakes.com) on Wed Jan 18th, 2006 at 12:01:38 PM EST
[ Parent ]
Two companies control over 95% of the operating systems market (Apple with about 5-6%, and Microsoft with about 90%).
If you're talking about desktops for home computing... okay. But a larger fraction than 4% of web servers and of computers in academic and research environments, as well as entire governments, use some flavour of Unix or other. Hell, even Apple's Mac OS X is a flavour of BSD! Then there's the embedded (cell-phones, pdas, etc) market.

As far as business model goes, Apple M$ and Sun think they can make money by selling you the operating system for more than it's worth and providing free support. The Open Source community believes they can give you the OS for free and make money on customization and support. We'll see who's right.

Given the time scales involved (Moore's law), it takes much less than a century to take down a monopoly in the computing industry.

guaranteed to evoke a violent reaction from police is to challenge their right to "define the situation." --- David Graeber citing Marc Cooper

by Migeru (migeru at eurotrib dot com) on Wed Jan 18th, 2006 at 12:24:57 PM EST
[ Parent ]

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