Everything is getting better.
The recession is over, and there never was a threat of a depression.
Last week 53 economists polled by Bloomberg, said the recession was over in the 3rd quarter of 09( this is the 3rd quarter) and we can expect renewed growth over the next 4 quarters of 1 1/2 – 2%.
Cool! Groovy! I wish I could be a professional economist so that
I could make up neat fantasy stories.
It’s nice to know that the stimulus was a success.
Where did I put all of those credit cards that I swore I would no longer use?
Let the good times roll…or not…
Our economic prognosticators have overlooked a few facts, which casts a partisan pall on their judgment.
Foreclosures were up 7% in July over last year.
Housing prices are still falling.
Unemployment is still going up, and has exceeded 20% in real terms.
Consumer price index is falling. The sign of a deflationary response to shrinking demand.
Business profits are falling in real terms( more on this in a moment)
Consumer spending is down and savings are up from a negative 2% to a positive 7% + over last year.
Today’s lead article in the Wall Street Journal headlines ” Reluctant Shoppers Hold Back Recovery”
The article goes on to state that major retailers reported thet American consumers continue to hunker down, casting a cloud over the durability of the US recovery.
Retailers transcending discount to luxury are providing foreboding results.From discount Target stores with a 6,2% drop in same store sales to luxury store Saks with a drop of 15.5%, retailers are forecasting slowing sales through the end of the year, and a “hoped for” recovery by the middle of 2010.
The Obama administration and the Democratic controlled Congress desperately need a recovering economy to maintain the justification for excessive spending. If the Stimulus spending and various other “changes to the economy” has worked then they stay in power and get to change and spend some more.
The 4th quarter numbers will reflect a healthy growth in Gross Domestic Production(GDP)
Don’t be deceived, The “healthy growth ” is compared to the 4th quarter of 2008, a period of economic disaster.
Of course the numbers are healthy compared to the end of last year. Especially when most profit margins are being maintained by shrinking overhead, namely payroll.
Don’t be surprised by a rally in stocks in the fall and early winter, but be careful when the recession/Depression roars back with a vengeance next year.
You can only cook the books so long. At some point reality will force its unwanted truth and the markets will have a serious correction.
Dear Friends.
PLEASE BE CAREFUL