NYU has a Stern School of Business?  I wonder what they think of the Laffer Curve.

I forwarded this Yahoo article to my 26 year old son who works with a major consulting firm in Atlanta with my admonition about his borrowing to redo his kitchen.  This is his response:

I already have decided to wait on the kitchen, at least for a while.  I have too many other expenses right now, and want to start saving some cash as well.  That being said, I have serious issues with the gloom and doom folks out there, mainly because they seem to be US centric.
I sat on a call the other day with 4 of the top economic minds out there, one from Cambridge, one from NYU Stern, and others from Barclays and Goldman Sachs.  They all agreed that a slight recession in the US was all but inevitable, regardless of what the FED does.  However, the item that was left out from this article was that our currency is currently hitting bottom and turning around.  Why?  Because the banking and housing crisis is a US problem, not a global one.  In the mean time people from Europe are investing billions into US businesses and residential real estate because the dollar is so cheap.  Economic growth in central Europe, Asia, and India is moving from a manufacturing and basic services based system of economies to design, thought leadership, and industry leadership system.  As long as we don’t have the Full Blown economic breakdown that this gloom and doom professor (who doesn’t work in the real world) theorizes, a minor recession in our economy actually benefits the global economy.  That being said, the majority of our fortune 500 companies have become global, and are benefiting enough from their global expansion that their growth is slowed by an American slowdown, but not reversed (for example, even with the reduction this quarter in American corporate spending, we still hit a record quarter because of our expansion elsewhere).  These companies are still spending in the US, added to the global economy spending money on US goods because the Dollar is so low (Exports have been up tremendously in the last 2-3 quarters) is a natural check that this guy completely MISSED!
Sorry, but I have serious issues with folks being so US centric that they look at gloom and doom scenarios while leaving out the fact that we live in a “multi-polar” world and are not nearly as constrained as we were even 10 years ago (1998, most would say the beginning of the troubles leading to the 2001 recession).  Our country does have a huge banking issue that they have come out of in making bad loans and mortgages.  However, those happened now 2 years ago and we are already coming out of that issue.
Anyways, I’m not doing the kitchen in the next few months, I’m waiting to figure out what the Atlanta housing market is going to do.  However, with *********’s new offering to pay for business school, I am looking to be headed that direction fall of 09, and will need to have the house ready to sell a good few months before then.  I basically have to redo the kitchen and the wall in the front yard before making that transition.

Cheers,

Barrdu—Many thanks for sharing your son’s very useful observations. I have a small antique arms business which is going great with Europeans, Russians (for some reason) and Israelis. They make the long trip to the shows I do, e.g. National Gun Day in Louisville this coming weekend and the famed Baltimore show, second week of March. They buy items from my European and Islamic antique inventory without a quibble. That’s what a weak dollar is doing for me! On the other hand, I have cut back my buying from Europe! Soon, perhaps, this situation may be reversed.  Best.  Dick

#3 Richard -  The Europeans no doubt are buying your antique weaponry in an attempt to modernize their armed forces.