The late great Forbes editor Jim Michaels hated stories that said, or implied, "on the one hand this, on the other hand that." A story should give a straight thumbs up or a thumbs down, but not both. Forgive me, Jim, wherever you are. I am about to violate your wise advice. Six Reasons The Rally Is Real
Six Reasons The Rally Will Collapse
Which scenario will play out? Post your comments below.
Tags: Economy, Investing, Rally, Recession, Stocks
It all turns on which side of boom or bust China falls.
The recession may not be over yet.
We are living a new wage : Post-recession.
It is time to start planning for the rebound.
G-D blessed America.
Rich’s Real Rally Reasons are mostly false -
1. Not true. Adjusted 1Q2009 would have been down more than 10% quarter over quarter if not the for the money pumped in by the feds.
2. The Fed’s helicopter money policy is not working. The banks are hoarding the money to try to keep their balance sheets out of the red.
3. Housing prices have not bottomed. Go ask a friend who lives in Phoenix which is the canary in the coal mine of the housing bubble.
4. True. The world will decouple from the US economy over then next few years, and then it will decouple from the US dollar - both very bad developments for residents of the USA.
5. I am so sick of the “better than forecast” bs being spewed by the pumpers at CNBC, the administration and, yes, Forbes. The real economy (non-government spending) continues to contract at rates higher than even in the 30’s.
6. Contrary to wishful thinking, Obama’s signature issues are quite alive. The house has already passed cap & trade and will pass the health bill when the members come back from vacation. The Senate will compromise slightly, softening the bills up a bit, then pass them. Rich, you should at least have just one opinion concerning whether Obama’s plans are dead or not - Real #6 directly contradicts Collapse #4 - which is it?
Rich, Let’s hope our elected representatives get an earful during their August recess. It will be a big economic plus to bury Health Care “reform”, Cap’n'Trade, et al. Interesting that here in northern CA even Obama’s supporters think these are too much.
R.
The risk is very real that the staggering government debt will be monetized, and that low inflation rates will soon be history. I’ve got to believe, though, that Bernanke will be more adept than Arthur Burns and William Miller were at controlling inlation. Of course, Bernanke may be forced to implement Volker-like control of the money supply. As I see it, a second recession by 2011 - similar to the 1980/1982 double-dip - seems more likely than hyperinflation.
The good news is the recession is over. The bad news is the greatest depression is just beginning.
Asking if the stock rally is real is like asking if market manipulation is real. Apparently Rich is blissfully unaware of the existence of the "Plunge Protection Team."
See http://en.wikipedia.org/wiki/Working_Group_on_Financial_Markets
My basic reason for confidently dismissing comrade Rich’s hopes for a reversal of America’s economic misfortunes can be summed up in one word: Socialism.
A picture is worth a thousand words.
http://bedlammagazine.com/files/images/news/Obama-socialism_0.jpg
The Socialist-in-Chief is deeply committed to nationalizing every aspect of America’s economy, and nothing short of divine intervention will prevent him from achieving his grand designs now that he enjoys decisive majorities in both houses of Congress.
We are in for a long four years…
Paul Maidment said it right. Any true understanding of the current events or prospects for the global economy should first and foremost discuss the success/failure of the stimulus efforts in China, the unwinding of the global excess capacity and the ongoing deleveraging of the private sector. Politics is more fun though …
Anything that will happen in the future happened in the 1970s.
Or, perhaps, we’re in a fundamentally different era. I think we’re more like the 1890s than the 1970s.
But past results are no guarantee of future returns.
http://news.yahoo.com/s/ap/us_plummeting_taxes
Nope, this recovery will be short lived.
The numbers could hardly be more stark: Tax receipts are on pace to drop 18 percent this year, the biggest single-year decline since the Great Depression, while the federal deficit balloons to a record $1.8 trillion.
I went out at lunch time and listend to one of those paranoid right wing crank talk shows. They were playing recordings purportedly taken at some recent town hall meetings. Our fearless reps were getting some pretty rough treatment from Seniors regarding Health Crare “reform”. Hopefully some one is giving them a piece of it over Cap’n'Trade too. There is hope yet!!
R.
Here’s definitive proof the “recovery” is at hand: Federal tax receipts fell the most since 1932, and the budget deficit is an earth shattering $1.8 trillion. In light of this information, no sane person would dare suggest the U.S. economy in recovery. This begs the question: Is Rich sane?
See http://news.yahoo.com/s/ap/us_plummeting_taxes
The Socialist-in-Chief betrays his real agenda for all the world to see:
http://www.breitbart.tv/uncovered-video-obama-explains-how-his-health-care-plan-will-eliminate-private-insurance/
I think we need to take note from the ancient Romans and open state brothels to get the tax revenue up. State weed could also be sold in them for additional tax revenue. Two birds with one stone.
Of course the wealthiest 1% should pay a surcharge for their their weed and prostitutes, while the underprivileged should get vouchers for their weed and prostitutes. In an era of hope and change it would be unfair for the wealthy to indulge themselves while the poor (through lack of opportunity) get smaller bags of weed and less sex. That’s just wrong.
I agree that consumer spending patterns have been altered, though not necessarily for a generation - that’s a long time. Rather, what the changes in consumer behavior signals to me is that the consumer will be a drag on the overall recovery, but will not derail it.
Retail price points and margins are likely to be under pressure for a while, success will require exemplary execution of all facets of the retailers strategy, and lesser performers will be under constant stress.
Bankers have altered consumer spending habits. People won’t have the easy credit they’ve had in the past, their equity lines are gone with the bubble. Even if inflation brought home prices back up, those scalded last time won’t be so quick to borrow against the equity and bankers who narrowly missed getting fired won’t be as liberal. A lot of companies are already below minimums just hoping they’ll pop out of the cloud any day but if California goes down, that will be decision height for a bunch of them, some will splatter. On the personal end I expect we’ll see a spike in defaults on second homes, boats, rv’s,credit cards, sports cars, spas,and _______.
B.O. and his merry men have used the so called stimulus money to increase the size of the government via billions of dollars of dream equipment and projects for agencies, while this might help certain sectors short term, the long term effect is less work for private contractors and more tax dollars to maintain the bigger agencies. (As an example, the fleets of road graders bought for the Forest Service so they can maintain their own roads rather than hire it done–good for John Deere this year but bad for road contractors and tax payers for the next ten.)
Unless we get a refund check for all the money wasted on the emperors new climate, discover a big pocket of oil, gold, or the next big thing, I think it’s mathematically impossible for our indebted economy to stick a survivable landing at this point.
Rich remains blissfully unaware when it comes to the imminent demise of America’s economy. As Rep. Michele Bachmann explains, America’s “free” enterprise system has been hijacked by a “gangster government” of over 20 Czars and an Imperial Presidency.
See http://www.youtube.com/watch?v=thR-lVuztIY&feature=rec-HM-r2
Will Rich every tune in to the reality channel?
I thought your blog was really accurate. I am really concerned about the thousands of people who have and will lose their jobs due to the failing economy. I would like to think that the signs of recovery are real… but we all know that it is the small businesses that employ the most people. And, under Pres.Obama, small bus. and the middle class worker is the hardest hit. I have recently finished my lst Blog - a practice for doing a web page. I want to start an internet business. My husband is self employed and due to illness, his income will not be available for many months to come. So, we are personally having to tighten our belts. Please read my blog on funding for education. Your comments would be appreciated. http://resourcesforyouforcollege.com
Read Full Article »