Keith Watanabe * NET 2.0

2008 looks to prove quite gloomy economically for the US.  The subprime lending issue has sprouted not just a leak but a flood of down hill rivers that are killing investors' confidence in the US economy overall.  And that situation has trickled into the Asian markets well.  However, it's pretty stomach churning in seeing the massive stock drop off recently.  It didn't take long, for example, for Japan's stock market to plunge, easily cutting 5000 points in less than 6 months.  Intel got killed in a terrible way when investors unmercifully dropped them after a disappointing outlook, despite being successfully profitable.  I even spotted AMD's stock, just sputtering like my mom's old 76 Camero at $6/share.

It doesn't look good boys and girls.

One thing I learned though is that fortunately markets are highly cyclical.  After weathering the storm from the dot com fall, I realized that if you manage to persist, you probably just need to lay low for about 2-3 years.  That's how long the dot com fall out took.  But some good came out of that (Google, Skype, the numerous buyouts) and the fact that technology got confidence back likewise instilled confidence back into me about the industry.

The housing market has trickled into the finance market in profound ways.  But then again the financial market has always been a sleazy one; anytime you involve money, the sin of greed pops up and people are more willing to sell their souls than benefit mankind.  That said, despite having all the excess housing, it'll be very good for people looking to break into the US housing market within the next 3 years.  The Federal Bank has intervened in cutting the lending rate and probably will continue to do so while the US economy falls.  That implies that interest rates will eventually feel the effects, especially as less loans are taken out.  For the individual it means that those who weren't able to get into the housing market at the right moment will have a new chance to sneak in.  At that time though, the US government will probably do some watchdog service to ensure that financial institutions will have some checks and balances to prevent customers who aren't able to handle such payments.  In short, a lot of potential good but only in the future.

Unfortunately though, it's still going to be rough for people.  The climbing gas prices haven't come to a screeching halt yet.  And the country is excessively spending for wars.  That does little good for the little people stuck in the middle of all this.  As a result, much of the political Presidential campaigns have turned towards the economy and what each contender will do.

So far, I haven't been that impressed with most people, except Obama.  I think he's more clued into what the average person might feel, so hopefully he'll really help provide tax relief to low to medium income families. Bush's own plan for handling the situation wasn't impressive at all.  The stock market wasn't receptive at all with his plans, dropping after feeling disappointment.  Then again, I feel that when Bush took power, most people were disappointed in the choice and sold off since people realized that he added no value to the domestic economy.  And truthfully outside of military spending, Bush has improved zero things domestically (doing just the opposite).

While the stock market will mostly be driven this year by the fallout from the housing bubble, the thing on everyone's minds that will drive the US economy for the next 4-8 years will be the next presidential candidate.  I think that America's investors will go into hibernation this year and wait to see the impending election.  The economy potentially can recover quicker if the next president is domestic friendly.  In that case, I think that Obama or Edwards would make good choices in this regard.  I'm too wary of Clinton and her recently pathos plea; it was unprofessional conduct on her part and hopefully people are smart enough to see beyond the tears to realize that you still need a platform and strength as a world leader.  Crying will make you seem weak (the only positive thing I can say about Bush is that people fear him.  Not because he's intelligent, a strong character, etc., but because he's an idiot that believes in his own hype and has enough power to back himself up).

Either way, I think a lot of people will lay low this year.  But in terms of jobs, engineering is still doing quite well.