Inogenius

At the middle of the month I do my routine check with our financial partners to make sure our numbers are where they should be. It's part of my normal day during the middle of the month. It allows us to project our gross income (and net) at the end of the month, and allows us to shift our models depending on what the outlook looks like. Today was that day, and because of this I was able to speak with a number of people in the finance world. The CEO of one agency I was speaking too -- and before Durden jumps on my back, the agency has less than 25 employees -- said her opinion of the current market was that the finance sector lead us into this recession, but the finance world will lead us out. Now I don't entirely disagree. Companies like Bank of America, JP Morgan Chase, who are clearly the dominant leaders in the market right now, will be holding the flag as we march out of the recession. But are they going to be the cause of it? I don't believe so.

The current trend in the United States is to make ourselves CLEAN AND GREEN BABY! Because of this we've seen funding for numerous new projects, and businesses that promise to change the future. Many of these projects will never lift off the ground, some of them will hold true to their promise. Windmills, and Hydropower all sound like very solid investments, because they're scalable, and routinely produce a return. Things like sawgrass paper, or generating electricity out of our garbage sounds real hopeful, but is it a solid business plan? Really, I doubt it. What this gives us though is promise, and more importantly, a ridiculously over valued market.

Remember back in 1998, when new dot coms were flying off the shelves, and ridiculous ideas like PriceLine.Com were an every day occurrence? Or remember GotAJob.Com that had no income, but a helluva lot of marketing expenses? Yeah, I remember seeing commercials for that one time and time again as I sat around all day, looking for a job. That was an overvalued market -- one that crashed of course, but the we over came the crash, only to experience an additional crash in the over valued finance market. Yes, I did say it there, this isn't a long term solution, but what America needs to come out of this recession is a short term solution. The green industry, with as quick as it's growing, and as promising as it may be can create imaginary wealth, luring shy investors back into the market. Luckily for us, the green industry is expected to have 100 billion dollars worth of investments come into it, which may create over 2 million jobs.

That's the kind of money our economy needs to come out of it's floundering state. A long term solution is necessary to bring stability, but there's never going to be one. It is what makes the world fun.

I know this was a bloggy type post. I don't have a blog, so Monks has become that for me. Feel free to discuss the idea, or argue the semantics of the post. It's mostly my own theory, the numbers are correct, but the belief that green will lead us out came from me.

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Assassin™

Would you mind clarifying your point here? You point out that those things aren't a solid business plan, yet they still somehow give us "promise"?

Also, what exactly do you mean by the phrase "over valued market"? Are you referring to investments in green energy? Raw materials? Labor? I just thought that was kind of ambiguous.

I'm not refuting anything, just asking for some clarification.

Although, if you were talking about investing, wouldn't it be better if the market was under-valued at this stage?

Inogenius

Promise probably wasn't the best word. Hope would've been better, I guess. My point was that even though the ideas behind them likely won't work, they're a bit of a figurehead in that we can move forward and further develop.

The Tesla vehicles, which are all electric powered, I feel are in a similar boat. I doubt their longevity, but what they can do is show that it is possible.

Their worth, basically. People will invest more than necessary thinking they may end up being worth more.

To be truthful, I'm not 100% certain of the answer to that question.
I would think that at this stage it would be good though for it to be under-valued as it would drive additional investors onto the scene. The investors would then bid with one another for the investments in the companies, which would then drive the values up ridiculously high causing the over-valuation. If it were to be over-valued from the start, then the investors would shy away, and the market would either never take off or prematurely crash.

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Assassin™

It wasn't the word choice that I was griping about. "hope" and "promise" have little connotative difference here.

What I'm asking is how, from an economic perspective, are these things supposedly giving us hope/promise? Developments in green energy being a "figurehead" representing how we can "move forward" (technologically?) is all well in good, but what I'm asking is, in the context of a recession, why does any of that matter? You were presenting green energy as if it was a lifeboat for the American economy, but I'm just not sure how you came to that conclusion, especially if you're also acknowledging that these projects aren't going to be good long-term business plans.

...I know what the literal meaning of "over valued market" is, it was just previously unclear to me exactly which market you were talking about.

So basically, you agree with me? This was what I was originally responding to:

Seeing as how you just went on to explain how much better an under-valued market would be, did I misunderstand you in thinking that you were originally presenting an over-valued market as a good thing?

Inogenius

At this point an under-valued market would be better. It'll build upon itself, as most markets do. Then it'll become over-valued, crash, and likely build back up.

It's not something that'll happen in 2008, or 2009. It might not even happen until 2010. Potentially it could never happen, as it's just my theory. I think that it will though.

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Assassin™

lol, not trying to be rude here, but now you're just kind of repeating yourself, while dodging the question that I asked and ignoring the inconsistency that I'm trying to point out.

Lets try once more:
Were you not implying here that an over-valued market given to us by green enterprises was a good thing? Did you not blatantly say that it was more important than the hope/promise that these projects give us?

Again, I don't mean to come across as arrogant, but I'd like at least some sort of acknowledgment here.

Inogenius

yay! i like when i'm a year ahead of the pros.


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