If you wanna know why our country is circling the drain...

[reason]

There are some other scary things happening...

China now surpasses us in foreign investment.

Foreign students matriculating in American universities have been declining in the last few years, opting to study in Europe and their home countries. This brain drain has resulted in renewed questioning of our schools to produce students proficient in science and math.

The next wave of "American" ingenuity is opting to go elsewhere.

Yesterday a fixed income strategist from one of the nation's top 5 banks visited our office. While I think he was incredibly full of himself, he was definitely knowledgeable (I had difficulty following him at times).

We got into a short discussion about equities and what we see for the stock market in 2005. I posed a question about Iraq and its effects on the market, and he pointed out the years of Vietnam up until 1978 the stock market only increased 10% total, mainly because wars are very expensive.

The thing he said that shocked me was when he described his personal holdings. He said he no longer holds many equities in his portfolio.

That's a remarkable thing for someone who is highly educated in investments and investment strategy. Granted, he involves himself in strategies most of us would never take - like investing in the yen - but to have a portfolio that has almost no equities? Wow.

[jumper69]

The trade deficit figues were released Oct 14th showing a goods and services deficit of $55.5 billion, compared with $50.9 billion in September, revised. The consensus forecast was -$53.5bn, so a number almost 4% larger than that is a bit of a shocker. These numbers show that a falling dollar will not bring down the deficit as long as imports are off the charts.

In case you're wondering, -$55.5bn is indeed a new all-time record, beating the old record of -$55.3bn standing since all of four months ago. The last five months have seen deficits of over $50bn, and the eleven largest monthly deficits have occurred in the last eleven months. Thus far the overall trade deficit is 21% larger than in 2003 and 48% larger than in 2002. And you can hardly blame high oil prices alone for the non-petroleum goods balance in October fell to -$42.6bn, it's second largest figure ever. "Insatiable" doesn't even begin to describe the United States' gaping import maw. We could easily see the trade deficit grow to 6% of GDP by the end of this year!

So, now what? Well, just what I have been saying, protectionist measures:
U.S. Imposes New Curbs on Clothing Imports
Barriers Are Intended to Curtail Chinese Shipments; Plan Roils Textile Industry
The new rules, scheduled to be published today in the Federal Register, were posted in recent days on a government Web site. Word of their impending imposition has stirred anger among clothing retailers and importers, who contend that the barriers contravene an international agreement to open the worldwide textile trade starting in 2005.
http://www.washingtonpost.com/ac2/wp...nguage=printer