The Future of Manufacturing in the US and Europe, The German Marshall Fund. Speakers: Ron A. Bloom, Simon Fraser, Wilfried Porth and Philip Stephens. I must admit I didn’t find this to be the most useful webcast but for those interested it may be worth watching.

Related: Manufacturing Driving USA Recovery – USA Manufacturing Output Continues to Increase (over the long term) – Manufacturing Output in Historically by USA, Europe and Asia – Capacity Utilization Rate Up Slightly From All Time Low (Aug 2009)

As I have said before, Elizabeth Warren is one of the people I find most informative on the economy we have created. This lecture (from January 31, 2008) is very interesting: The Coming Collapse of the Middle Class: higher risks, lower rewards and a shrinking safety net. It is important for us to realize that the decisions we make have consequences. If we allow corruption to grow and grow in the USA we will suffer more and more. If we continue to elect people that give away society wealth to those the pay them to the detriment of society (investment banks, drug companies, “intellectual property” lawyers, retail banks, farmers, trial lawyers, hedge fund managers, trust fund babies, physicians…) that naturally means their is less wealth for the rest of society.

Interesting data. Looking at standard family (Mom, Dad and 2 kids from 1970 to 2005), in inflation adjusted dollars: earnings increased a great deal (due to women working much more) but disposable income decreased. This is because basic expenses increased: health care, housing, transportation… (and this is with assuming employer provided health care – which has really been decreasing in likelihood over time). Those families are also more deeply in debt and reliant on 2 incomes. And if either income producer losses their jobs the economics of the family fail. Which means the family is much more at risk.

It really is great that lectures like this are available to us now.

Related: Elizabeth Warren Webcast On Failure to Fix the System – In the USA 43% Have Less Than $10,000 in Retirement Savings – Failure to Regulate Financial Markets Leads to Predictable Consequences – Lobbyists Keep Tax Off Billion Dollar Private Equities Deals and On For Our Grandchildren

He covers the topics he discusses in the video in his new book: Freefall

Related: There is No Invisible Hand – Failure to Regulate Financial Markets Leads to Predictable Consequences – Market Inefficiencies and Efficient Market Theory – Congress Eases Bank Laws (1999) – Volcker on the Great Recession and Need for Reform

3 Nobel prize winning economists, Robert C. Merton, Robert Solow and Paul Samuelson, took questions about the impending retirement savings crisis from PBS NewsHour correspondent Paul Solman in October 2008. Paul Solman asked them about their personal portfolios in the clip shown above.

Robert Merton tells his portfolio portfolio is in a Global Index Fund, Treasury Inflation-Protected Securities, and one hedge fund. He said he had been invested in a TIAA commercial real estate fund until recently, but sold in early 2008 when he worried commercial real estate prices had increased too far. He also sold out his Municipal bond holdings.

Robert Solow says he has no idea of his portfolio.

Paul Samuelson declined to say. He did offer that timing is not something investors can successfully do. He stated that timing the selling of assets was not as difficult as timing when to get back in. And that markets move very quickly so you can miss out on big gains. 2009 provided a great example of this. Many people sold stocks in late 2008 and early 2009. And most did not get back in. In 2009 the S&P 500 was up 26%.

Related: Retirement Savings Allocation for 2010 – How Much Will I Need to Save for Retirement? – Gen X Retirement – Many Retirees Face Prospect of Outliving Savings

Elizabeth Warren is the single person I most trust with understanding the problems of our current credit crisis and those who perpetuate the climate that created the crisis. Unfortunately those paying politicians are winning in their attempts to retain the current broken model. We can only hope we start implementing policies Elizabeth Warren supports – all of which seem sensible to me (except I am skeptical on her executive pay idea until I hear the specifics).

She is completely right that the congress giving hundreds of billions of dollars to those that give Congressmen big donations is wrong. Something needs to be done. Unfortunately it looks like the taxpayers are again looking to re-elect politicians writing rules to help those that pay the congressmen well (one of the problems is there is little alternative – often both the Democrat and Republican candidates will both provide favors to those giving them the largest bribes/donations – but you get the government you deserve and we don’t seem to deserve a very good one). We suffer now from the result of them doing so the last 20 years. Wall Street has a winning model and betting against their ability to turn Washington into a way for them to mint money and be favored by Washington rule making is probably a losing bet. If Wall Street wins the cost will again be in the Trillions for the damage caused to the economy.

Related: If you Can’t Explain it, You Can’t Sell It – Jim Rogers on the Financial Market Mess – Misuse of Statistics – Mania in Financial Markets – Skeptics Think Big Banks Should Not be Bailed Out

In the webcast interview above Warren Buffett and Bill Gates discuss business, health care, economics, wall street, the Fed and more. Both agree the health care system is far too expensive and needs to be fixed. And both agree the current reforms are far too small and seem to do little to address the core problems with incentives and entrenched interests maintaining system in need of reform.

Both also agree the future is bright for the USA and the world economically. The innovation possible will may well come from more locations in the next century but those innovations will also come from the USA.

Warren Buffett also defends the independent Federal Reserve board system.

Related: Warren Buffet Webcast to MBAs – Advice from Warren Buffett UT at Austin business school – Bill Gates: Capitalism in the 21st Century

Hans Rosling uses his fascinating data-bubble software to burst myths about the developing world. Look for new analysis on China and the post-bailout world, mixed with classic data shows.

“The worldview students have corresponds to reality the year their teachers were born”

The software he uses, the very cool Gapminder world, developed by his son and bought by Google is available online.

He also correctly congratulates the USA for providing free data it has collected worldwide, for decades, on world health. And correctly criticizes the World Bank for selling the data they compile using taxpayer funds.

Related: Data Visualization Health Care Example – Economic Measurement Issues Arising from Globalization – Millennium Development Goals – Government Debt Compared to GDP 1990-2007

Nouriel Roubini is still worried about the US economy, though he does believe we are coming to the end of the severe recession we have been in.

I believe, that if you were worried about your portfolio being overweighted in stocks late last year, now is a good time to move some money out of the stock market. In December 2008, when many were selling in panic, I invested more in stocks.

The stock market has been on a tear increasing

1 December 2008 the S&P 500 was at 816
1 January 2009 – 903
6 March 2009 – 684 (the lowest point since 1996)
1 May 2009 – 878
1 August 2009 – 987
5 October 2009 – 1040

In 6 months, since the market hit a low on March 6th, it is up 52%. Certainly the decrease in prices seemed overdone. The 50% increase in prices seems overdone also. But trying to predict short term moves in the stock market (say under 1 year) is very difficult and few people can do so successfully (even if you can find lots of people offering their guesses). Predicting the economy, while not easy, is much much easier that predicting the stock market.

If you are worried about how much of your portfolio is in stocks moving some our of stocks now makes some sense. It makes much more sense to sell now than it did 10 months ago, when many people were selling their stocks. I still would stay away from long term bonds and only hold a small amount in short term bonds: I would hold cash (money market funds, t-bills, CDs…) even though they pay next to nothing now. Personally I am not moving my money out of stocks but I am comfortable with my portfolio allocation.

Related: Stocks Still Overpriced? (December 2008) – Mobius Says Derivatives, Stimulus to Spark New Crisis – Add to Your 401(k) and IRA

Quotes by Nouriel Roubini from the interview:

Peter Schiff answers economic questions from Reddit users (see part 2). See our Economics and Investing Reddit. He made the point that inflation will be a serious problem. He also recommended several books, including: Economics in One Simple Lesson by Henry Hazlit and The Biggest Con: How the Government is Fleecing You by his father. He is an opinionated economist. I certainly do not agree with everything he says but I think he is worth listening to. As an investor I believe it is important to seek out unconventional opinions and find worthwhile unconventional opinions that can help you beat the market.

Related: Skeptics Think Big Banks Should Not be Bailed Out – Inflation is a Real Threat – Let the Good Times Roll (using Credit) – Dell, Reddit and Customer Focus

Don’t let the talking heads on TV convince you that capitalism is about corrupt businessmen that think they are entitled to loot companies. That is about the powerful accepting money from their golfing buddies to share the loot among themselves. Capitalism is about places like Trickle Up, micro-finance, appropriate technology and entrepreneurs making better lives for themselves and their families. Donate to Trickle Up (I do).

Related: High School Student Provide Clean Water Solution – Creating a World Without Poverty – Microfinancing Entrepreneurs – Ignorance of Capitalism