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A Bad Case of Economic Hypochondria?
- Bank of England
- Ben Bernanke
- Ben Bernanke
- Bond
- Brazil
- Brian Wesbury
- China
- Double Dip
- European Central Bank
- Federal Reserve
- Global Economy
- Greece
- Gross Domestic Product
- Housing Market
- India
- Ireland
- Netherlands
- New Normal
- Obama Administration
- Recession
- recovery
- Sovereign Debt
- Testimony
- Unemployment
- White House
- World Trade
Following my latest post on whether the Fed has defused the neutron bomb, a senior pension fund manager sent me a link to AXA Investment Managers' latest weekly comment by Eric Chaney, Deflation may have won a battle, but not the war.
It
is an excellent read which demonstrates why any discussion on the
inflation/deflation debate that doesn't take into account what's going
on outside the US is missing the bigger picture. I quote the following:
Although contemporaneous estimates of output gaps are somewhat elusive, the broad picture is clear: a
growing portion of the global economy is facing inflation risks and the
bulk of developed economies is no longer in the deflation danger zone.
This uneven dynamic distribution matters a lot for investors, who need
to make up their mind about inflation. One key lesson from the past
cycle is that price movements have a larger common component than in
previous times; call it the globalisation factor. Matteo Ciccarelli and
Benoît Mojon estimated that “(inflation rates of) OECD countries have a
common factor that alone accounts for nearly 70% of their variance” (ECB
working paper, October 2005), a finding that is consistent with later
research by Haroon Mumtaz and Paolo Surico (Bank of England working
paper, February 2008). In such a world, the fact that China, India and
Brazil have entered into the inflation risk zone matters more than
Spain, Ireland and Greece being on the brink of deflation.
Mr. Chaney concludes by stating:
In
sum, there is no evidence that deflation has gained much ground during
the summer. For sure, a double dip of the US economy would tick a few
boxes in the deflation camp. Yet the
most likely scenario in our view is that the US has embarked on a slow
growth cycle, the mirror image of the artificially debt-fuelled previous
decade, rather than on a stop-and-go cycle. Once the markets get
a clearer picture of business cycle developments, which may
unfortunately take several months, there are good reasons to believe
that the current deflation buzz will be quickly replaced by its
opposite. In the meantime, enjoy the bond rally!
There are
other encouraging signs suggesting that the global recovery is back on
track. This past week, the CPB Netherlands Bureau for Economic Policy
Analysis released its World Trade Monitor for June 2010, showing that world trade was up 0.7% month on month after an upwardly revised 2.3% increase in May.
Why
is this significant? Because, as Yanick Desnoyers, Assistant Chief
Economist at the National Bank of Canada discusses below, Global trade volume finally back to its previous peak:
According
to CPB Netherlands Bureau for Economic Policy Analysis, the volume of
world trade grew 0.7% in June after an upwardly revised 2.3% gain in
May. This represents the ninth increase in ten months. Global trade
volume is now expanding at a 21.2% growth on twelve month basis, just
shy of the 23% peak registered in May. In the second quarter as a whole,
global volume trade was up a significant 15.3%. As today’s hot chart
shows (click on char above), it took only about a year for world trade
volume to virtually get back to its previous peak.On
the global industrial output side, the index is already in an expansion
mode with a 0.7% gain above its previous peak, despite the fact that IP
is still down 10% in advanced economies. After all, it seems
that fears of sovereign debt contagion from the Euro zone earlier in the
spring did not have a material impact on global trade volume. Despite
an upcoming slowdown in the U.S., we are still forecasting an above 4%
global GDP growth in 2010.
What this tells you is that
this cycle is different than previous cycles because the emerging
economies are the source of growth. Too many analysts are focused solely
on what is going on in the US and other developed economies. I too had
written about Galton's fallacy and the myth of decoupling, but maybe this view needs to be revisited.
And
even in the US, I tend to think there is way too much gloom & doom,
a point underscored by Ross DeVol, executive director of economic
research at the Milken Institute, who wrote an op-ed in the WSJ this
past week, The Case for Economic Optimism:
Gloom
and doom is the hallmark of the current economic debate, as the most
recent congressional testimony from Federal Reserve Chairman Ben
Bernanke demonstrates. Despite Mr. Bernanke's generally upbeat message
on the Fed's official forecast, which calls for moderate economic
growth of somewhere between 3.0% to 3.5% this year, the market and the
media fixated on his acknowledgment that the outlook was "unusually
uncertain." Those words have only reverberated in the past few weeks,
bolstering economic pessimists.
There's
a point at which pessimism becomes a self-fulfilling prophesy, scaring
businesses away from investing or hiring. The dark tone of today's
discourse is at risk of doing just that.
The Milken Institute's new study, "From Recession to Recovery: Analyzing America's Return to Growth"
is based on extensive and dispassionate econometric analysis. It
concludes that the U.S. economy remains more flexible and resilient—and
has more underlying momentum—than is generally acknowledged. In fact,
our projections show cause for measured optimism: A return to modest
but sustainable growth is close at hand.
America's
businesses are capable of navigating around policy uncertainty and the
twists and turns of a volatile global economy. While slow
private-sector job growth is to be expected in the early stages of a
recovery, the U.S. should add 1.5 million jobs in 2010, 3.1 million in
2011, and 2.6 million in 2012. That will translate into real GDP growth
of 3.3% in 2010, 3.7% in 2011, and 3.8% in 2012.
In this
pessimistic climate, this forecast will likely be considered
contrarian. So why is our economic outlook more sanguine than the
current consensus? For one, robust (albeit moderating) economic growth
in developing countries, particularly in Asia, will provide support for
U.S. exports. Look no further than Caterpillar, which reported a
doubling of its earnings in the second quarter of 2010 and whose
product line is sold out for the rest of the year.
Improved
business confidence is already spurring strong investment in equipment
and software. Record-low U.S. long-term interest rates are supporting
the recovery. And the benign inflationary environment allows the Fed to
keep short-term interest rates near zero until late this year, or even
into 2011 if it desires.
Historical context offers further
reason to expect a rebound. The peak-to-trough decline in real GDP
during this recession was 4.1%, making it the most severe downturn
since World War II. But throughout the postwar period, the rate of
economic recovery from past recessions has been proportional to the
depth of the decline experienced. While this relationship has been
somewhat variable, it is well-established. Our projections for GDP
growth are above consensus but are substantially below a normal rate of
recovery after a recession of this severity.
The
naysayers are right that there's a "new normal" economy, but it's not
that the potential long-term growth rate of the U.S. is substantially
diminished, as they say. It's that this time, the fulfillment of
pent-up demand will be subdued because consumers were living so far
above their means during the bubble years. Nevertheless, consumer
durables and business investment in equipment will see some previously
postponed purchases finally happen—if not this year, certainly by 2011
and 2012.
What needs to happen on the policy front in order to build momentum?
In
the first place, small businesses need access to more bank credit to
create jobs. Banks feel conflicted by calls from the Obama
administration to increase lending while regulators are instructing them
to add to their reserves. Regulators need to be reminded that some
risk is necessary in a market economy.
The White House also
should press Congress to pass legislation modernizing Cold War–era
restrictions on exports of technology products and services that are
already commercially available from our allies. This would boost U.S.
exports and reduce the deficit. And if the White House is serious about
doubling exports by 2015, it needs to push trade deals with South
Korea, Colombia and Costa Rica through Congress.
For its part,
Congress must move immediately to restore the lapsed R&D tax
credit. Even better, it should expand the credit and make it permanent.Congress also should pass legislation to temporarily extend the
Bush tax cuts that are set to expire at the end of this year. It's
important not to remove any economic stimulus as long as the
sustainability of the recovery is in question.Another must-do:
by 2012, Congress needs a credible long-term plan in place to reduce
the deficit. If it doesn't, international financial markets might force
our hand by demanding a higher rate of return on U.S. Treasurys.
Washington
has to focus like a laser on helping businesses create jobs, while the
rest of us should avoid talking ourselves out of a recovery by
dwelling on the doom and gloom. The U.S. economy has already adapted to
serious imbalances in record time: There's ample reason to believe in
its dynamism in the months and years ahead.
While US consumers were living beyond their means, they're paying down
debts fast. The amount consumers owed on their credit cards in this
year's second quarter dropped to the lowest level in more than eight years as cardholders continued to pay off balances in the uncertain economy.
Moreover, the FT reports that US credit-card losses are falling faster than expected,
with the six largest card issuers expected to earn nearly $10bn more
in the coming 12 months than predicted, says a study by Moody's:
Historically, US credit-card write-offs have tracked the unemployment rate.
But for the first time in a decade, loans considered uncollectible by
lenders are falling faster than the jobless rate, prompting analysts to
revise earnings models.
The divergence from past experience reflects bank efforts to weed out risky borrowers, moves by consumers to pare back debts after the excesses of the past decade and new credit card rules intended to discourage reckless lending.
“We
are getting back to an old-fashioned basis of lending, providing
credit only to people who have the ability to repay,” said Curt
Beaudouin, an analyst at Moody’s.
Finally,
while everyone is focused on weakness in the job and housing market,
listen to Brian Wesbury of First Trust Advisors below who thinks the US
economy is fine and that the country's just suffering from a case of
what he calls "economic hypochondria."
Wesbury blames stimulus for delaying the recovery, which is arguable,
and his assertion that the economy is "fine" is ridiculous, but I think
he's right on upward pressure on growth, expecting the economy to
accelerate over the next year.
»
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Mixed feelings about Leo's articles here. It's been a very long time since he wrote anything positive that I agreed with or even thought contributed much. He does seem to be rather Pollyanna. On the other hand, and importantly, diversity of reasonable opinion is very important to getting value here; otherwise each and every article could contain nothing more than "Gold bitches!" and be a good ZH article. Sites like that exist. They are utterly useless.
I think the insulting responses are useless, but the responses that pick apart his assertions in detail are extremely useful and appropriate.
Regarding the specific assertion of this article, I think a purported recovery that's purportedly driven by developing nations is simply another fairy tale of ivory tower economists. It has some attraction on paper, but it doesn't make any real sense. I think a more reasonable interpretation is a coma for the developed world that really drives the global economy, and some mixture of speculation and inventory rebuilding in the third world. Dominoes are falling, and they don't always fall in perfectly timed sequence.
Mad Max: I came to a similar conclusion; that Leo is included here to keep us on our toes. Also to counter, for the newbies, the drivel that the MSM supplies. ZH puts the logic, facts, ethics [truth] together to counter the Matrix and its lackeys.
"scaring businesses away from investing or hiring."
It's not the "doom and gloom" rhetoric Leo, its the capricious tax code/legislation/govt sponsored monopolies (think telcos) that keep me from hiring and/or investing.
There is no way for me to make a reasonable business plan to invest and hire when tax laws change constantly, and the current administration has proven itself very proficient at changing the game on a whim (health insurance reform, carbon credits, GM, AIG), and hold out trial balloons of further change (taxing health benefits as income, increasing payroll taxes, mandatory this and that to add to the COB).
I just don't know what will come next, aside from further increases in "fees", "captures" and taxes that in a deflationary price pressure environment, I cannot pass on to the customer.
My choice is simple,
a.)hire someone, risk profitability due to unknown tax law changes, rules changes, or,
b.) just do it myself, the work of 2 or 3 people, stay profitable (barely) and work 80+ hours a week, leaving me no time to spread/spend into the greater consumer economy (which is ~70% of the US economy).
If this administration and Wall Street really want to increase optimism, then just lay out, in writing, not-subject-to-change, in less than 2000+ pages, WHAT taxes and govt ADDED COB will be for the next 10 years. [edit] Then I can plan around that information.
I have 25000 sq/ft of roof space here in the high desert that I would love to install solar panels (even some Chinese ones) to help offset my power costs...but not gonna happen in the current Kafka-esque regulatory environment.
Many times I appreciate your seeming eternal optimism, Leo, but this article's sources just don't get out much apparently, or/and have never, ever, run a "real" ground level/brick and mortor business. Kind of like our political and economic "leaders"...all theory, no experience of sweat.
I calculated it will cost me about 30,000 dollars to install sufficent solar on my roof (A tiny one....) to live off the sun by day and batteries while sleeping at night.
It is still cheaper to buy electricity and natural gas for about 20,000 dollars over 30 years based on current costs.
I too would love to export power to the grid for income from the Utitlity, but regulations make that impossible. If all Americans exported power from every home to the grid for some income instead of a bill each month, the United States will be more resilient to failures.
I have not yet given up on solar. I think one day we will simply accumulate 40,000 dollars in cash with no debt and buy it outright and start exporting for monthly cash income.
That will just be another bill made to go away.
"There are other encouraging signs suggesting that the global recovery is back on track"
I think this statement is the source of Leo's confusion & some readers adverse reaction.
Some (e.g. Leo) think that the 'inflationary' boom pre 2008 was somehow healthy & normal state of affairs.
This thinking is erroneous, it was the result of monetary disorder just as the present 'deflation' is a result of the same monetary disorder. Read Doug Noland at www.prudentbear.com, he has a better handle on credit than anyone featured here on ZH.
The inflation or deflation debate is superfluous, they are the same thing.
That said I do agree with Leo that the stockmarket will not crash, more likely rise. I don't see it as 'healthy' & a return to 'normality' though, it's just that money market dynamics are different to pre-crash days.
So, if I understand you correctly, you are asserting that the stock and money markets are divorced from, and not related to or rely upon, "on the ground" economic realities.
If so, I would agree.
The question is, which is reality, and which is the program (sorry, had to throw a Matrix reference in, but it does seem to be an accurate metaphor).
:)
No, I wouldn't say divorced from. I'd say the stock and money markets are one and the same thing, just different levels of risk which being denominated in the various currencies are largely (but not totally, hence not divorced from) in control of the issuer of that currency.
This has led to gross distortions (but not divorce) in the 'money' (actually a lot of bad credit) markets a.k.a monetary disorder, leading to volatility, inflation, deflation, call it whatever you want.
To parrot something I read here at ZH:
It's easier to rig the stock market than fix the economy.
The synthetic economy has not blended well with the –work for a dollar and spend and save it real economy. Synthetic means not real and the leveraged bogus instruments that have destroyed our World economy still exist, are still created, and the criminals that dude the deed are not hung or burned at the stake, as we have a reasonable expectation of being only fair. Your piece might have a chance at the high school lever, unless some of the kids are aware of the huge unemployment of youth, or have lost their home, or someone they know has lost a job, or they realize the hard work to be a top student has been a waste and their dreams of “making it” with a college degree are shattered.
And here is an interesting twist. The Government is telling the public that education is the solution. The educated are jobless. This lie, which was retold today at Sharpton’s event, has two edges. One side keeps kids out of the non-existent job market, spending money to get educated. The other side of the lie is brilliant. It tells America that if you are not making it, the fault lies with you because you did not get enough education. The lie says Americans are at fault and if they get educated there is a gold mine at the end of that rainbow. The recent graduate knows this is a lie. The less smart do not know that.
We don’t need more lies from anyone.
Yes, great paragraph and with the ever increasing cost and investment returns moving in opposite direction, that solution is a joke. I heard some expert on mainstream telling the young that they should not borrow more than what they can earn the first year out after graduation. How is that possible?
the education scam is glorious, just go into debt for 100K, you'll get it back kid. just double down, lie on your resume, cheat on your tests. maybe you'll get a government appointed position. So you went to Yale with Kerry and Bush and you are doing what now? I'm sorry you got straight A's, and those guys got C's, but you're a loser? Gee I wonder what part of aristocratic privilege you didn't understand? the smart guys are the tribal hoo hahs who rig IED's out of cell phone parts, when then never had a third grade education. ouch ouch ouch.you need a post graduate US education, so you can join the ruling class. We need no more lies from less than anyone, to make your point.
Yeah great plan, starting your working life 50 Grand in the hole.
One of the things that make me foam at the mouth is the idiotic way we look at education (which I thought was the process of making people smarter). Look at the power of the internet, things like you tube and wikipedia.
For minimal costs, we could set up full education curriculums that anyone with the time and ambition could complete (sadly however, no keg stands). We really could do this, but the "education" scam is one of the best out there, so I don't expect to see any progress made on this front either.
Great post.
I got out of college about halfway through when mounting student loans every three months drove the monthly payments past what I could make on my job. So, we consolidated it all and hopefully accumulate enough next year to make it go away.
I feel pain for all of these young 18 to 30 some year olds coming to college and are handed forms to sign up for 5,000 dollars all the way to 100,000 of debt quickly so that they may be allowed to attend classes on time for the next 4 to 6 years of life.
In some cases they succeed. The rest will drop out and some are crushed by the debt having never a chance to life.
That has to stop.
Now for the Public School System.
I attended a school for years that had a specific budget and in the black each year. Before I attended that school, my grand parents homeschooled me in reading, writing and practical things so that when I hit 2nd grade I already was running with the 5th graders and writing in cursive as well. Such a feat would not have been possible without such home schooling.
That was over 40 years ago, they did not even have a word for home school then. It was expected of both parents and grandparents to teach kids everything possible until age 6 for school time.
School time after Kindergarden to Graduation progressively got very expensive and with results that we know how to take a test but dont know how to recite the entire multiplication tables or balance a checkbook.
And they still ask for more money every year.
Enough already. We spent the first 160 years in one room local school houses gathering wood and a bit of coal to heat the room and we made out pretty durn good.
Here ya go, from MIT, for free....
http://ocw.mit.edu/index.htm
Thanks for that, Tom!
nice one tom! thanks!!
The good ole days, when your house could pay for everything including an overpriced education for your kid:
http://www.youtube.com/watch?v=D8T5CS42MMY&feature=related
Great point in paragraph 2....education is now a racket. I guess I am a prime example, my degree and early path was/is Psychology...but I was taught (outside the "education" system, my grandfather, came of age in the first depression as an civil engineer) how to think critically and learn. I have been in the IT biz for the last 17 years, and I hated computer classes in college...lol...200 lines of code to divide 100 by 5...lol.
Point is, if you know how to learn, you can do anything, and, in all reality, do you really need a MBA to generate a P&L statement? Really? I do it monthly, without any accounting coursework at an institution of higher learning...It's just well defined mathematical functions. Easy to learn.
Brilliant point in paragraph 2. Thank you. I hand't thought of it that way.
Yes indeed.
Prechter woudl say you are rigth but it doesn't matter as peoples moods are self-fulfilling prophecy...so if we think we are sick, even of lack of germs will not keep us healthy....but this is the way of booms and busts...things weren't as good as we felt in 99 or 2005, things may not be as bad as we felt in March of 09...but once we know house prices will not go up forever, we start to freak, no way to avoid...unless you are in Canada...
Your cratering home value is psychosomatic!
Cratering value so be it. But we are maintaining our home free and clear and not stopping what is required to upkeep it so that we may not be homeless due to a crumbling building.
We bought a home to live not to invest.
Leo, you have written about your battle w multiple sclerosis, if memory serves me properly. Nonetheless, your writing must stand on its own. I don't know where you live (? Canada), but as a U. S. citizen living in the U. S., I don't give a rat's ass about accelerating trade between Brazil and China, or China and Australia/NZ/Vietnam etc. I care about America and my family, friends, and myself. Your own chart shows "advanced economies" are actually lagging the ROW. Thus it's not hypochondria, and as a licensed medical doctor I have some authority on this topic. It would appear you have confused the dynamism of the parts of the world that did not partake of the American-Anglo toxic debt creation and purchase and that therefore are both sort of going on as they would have before the S hit the F and eating our lunch. Except that large houses in the US are nice second homes for Russians and South Americans, our malinvestment in such luxuries helps us not a whit in international competitiveness. They are hungrier and when they produce manufactured goods or edibles, the purchaser doesn't care if the worker lives in a 2 room house and took a bus to work (or walked or rode a bike) or lives in a giant house by intl standards and drives a 3500 pound air-conditioned vehicle to work.
These are simple concepts that I think that even Paul Krugman gets, misguided though his policy recommendations are.
Finally, if you want to go with a mainstream org that imperfections and mild cheerleading aside, called the recession timely and called the conversion to the depression timely in late Aug 2008, and called the bump up within the depression timely as well last year, look at ECRI. Their long term forecast is for slow growth with frequent recessions. In that context, it's close to irrelevant exactly what the economy does quarter to quarter. As so many of the commenters about your piece have said, the people, policies and permanent Establishment that led the US to this mess remain in place.
To expect matters to get a lot better represents a triumph of hope over evidence.
I for one will remain true to the basis of modern medicine, which is based on observation of that that is, whether the diagnosis is good or bad, rather than on Hopium. So I'm downbeat about the near-term to intermediate future of the U. S. of A.
Amen!
If we have economic hypochondria, then so does the guy with the 200 pound tumor.
The very premis of the article is just plain dumb. We have a government that is printing a dollar for every dollar in taxes it takes in. We have a government whos size is now equal to that of the entire private sector. We've got unemployment at generational highs. We've got world wide debt per GDP at all time highs (all time as in going back to the Phoenicians). We've got a world addicted to fiat money.
The tumor must have hit Leo's brain, and it's making him hallucinate.
Chairman of the Joint Chiefs is searching for bottle containing his placebo prescription.
"Ahhh, better now."
I cannot get over this. How dare you! How dare you respond to the people out in the world who have lost their jobs, had their credit ruined, cars repoed, homes foreclosed on, forced to move in with friends or family, afraid of how they will feed their kids, clothe them, pay the heat this winter, HOW DARE YOU, you pompous bastard, minimize their suffering. HOW DARE YOU! You may not know it, but there are people really suffering out there and you, in your ivory tower, have the TEMERITY to tell them it's all in their head. Sir, you are well beneath contempt.
Have you no shame?
Well said, and that extends to what you wrote at the top. The gloves are off, and the shit is hitting the fucking fan so fast and hard that the fan is about receive its walking papers. Where's the upside to an economy run by a bunch of fucking genetic backwash like Bernanke and his troupe? Where's the upside when we're struggling to make dollars that are consistently debased and devalued by every piece of fuckery that these assholes can invent to help keep such a heavily-stratified system in place? Where's the upside when the bank raises your payments because property values are tanking and now you're underwater, even if you just want to stay in your fucking house, forget the arbitrary value applied to it by these morons who screwed everyting up in the first place?
Yeah, Leo...this festering pile of stank bullshit, served up steaming hot by the fuckwads at the Fed, the greedy scumbags at Goldman, et al, and their puppets in the government is really just "all in my head."
There is indeed an incredible amount of suffering in this country. Not all the recipients of food stamps and of extended UE benefits are lazy. The fact that our so-called leaders are indifferent to this will go down as one of the most craven acts of governing in American history and the catalyst for the velvet revolution that is to come.
Not so sure about "velvet"....hope I am wrong. This week, on a street corner, a few white trade workers with signs looking for work, sporting their electricians, carpenters, etc., union tshirts for credibility (not sympathy, where I live is pretty hard-core right-to-work). Is getting more and more common where I live, no more Mexicans at Home Depot looking for day work to feed their families, but regular citizens...people are losing too much, too fast, and I fear they will "lose it", as Celente would say.
what part of country are you in?
Very dangerous situation. Things are calm-for now. But no question the rubber band is being stretched tighter every day. Obama's on the beach without a care in the world and all it's going to take is one thing to light the fuse. It's been August and maybe that's why it's been so quiet. But I keep worrying that either everything will begin to happen after Labor Day or something will happen like a thunderbolt out of the sky.
I'm almost 60 and I've never seen anything like this nor ever been more nervous. Maybe I'm spending too much time on ZH. :-)
Staring at a squirming mass of maggots, i.e., the bad news regarding the economy to be found here, does indeed color one's point of view. Do what I do, spend more time with the people you care about and make sure they know that you care about them.
It's not just you, Mitch. Everybody on this side of the rainbow can feel it.
Back when Clinton was President and in a different context, there was a saying "Where's the outrage?" I think it's time we brought it back.
Mitchman
Only people receiving government checks are totally oblivious to what's happening on the ground. This thing is snowballing, and the more bullshit dished out by lying politicians and Wallstreet criminal propogandists, the worse the outcome will be.
Fact is ZH gives all of us an outlet but it also gives us preparation. Many jobless and homeless families are destitute. That is what worries me.
Remember, full faith and credit of the US Government.
Suppose that vanished and the checks stopped?
Then we have discontent.
There are MANY people who are hurting. I have not seen anything like this in my life time.
However, I blame people who went out and tried to flip 700,000 dollar houses and sell them for a million during the boom. And those who ran up credit card balances and walked away. And also those who just simply stopped paying the mortgage and now are hoping they dont get kicked out and stay for free on the tax payer's dime.
There is a time a-coming. That will test all of us. We will react in many different ways. Some will prepare, others will simply mentally delete the reality and go on living blissfully and there are a few who wish things to get better and will try to lead others to it too.
My main problem is that the United States has charged a gigantic Credit Card of sorts since the Carter Administration and have not lived as a Nation within thier means. In the past there were Presidents who have slashed the United States Debt as a whole and made things better and other times where the United States collectively suffered so much.
George Washington's Final Message as he left Congress for good and on his way back to Mt Vernon indicated we must never as a Nation forget to live within our means and other things as well, including the Consitution that provides for the People to bear arms and defend themselves and sometimes buy and pay for our Liberty with thier life and blood in service.
We have been a long road to get to this point. People are awake now. And some are on the floor rudely rousted by the fact that things are not going to be happily ever after. We are going to find out really fast (Within a year or two perhaps) where the United States will be as a Country and as a People.
Personally I have slashed debt to almost nothing, I have slashed spending to the lowest worst case possible. I have made sure to have a Crown money map path of savings so we can endure a time of no income if necessary. I provided for defense and provision as well if only for a short time. I have tried my best to guide my household in these green seas filled with storms and greybeards over the bow.
I just want the United States Government to quit doing the same tired old Political stuff and sit down, go to work and generate a budget that will provide a surplus and fast.
If they dont do it, the people will. Starting with the lowest class in the worst poverty first.
I think the lower class is too coopted and comfy to do it. The numbers and the rage have to come from the middle. It is they who are getting and will be getting the worst of this.
"
Gloom and doom is the hallmark of the current economic debate, as the most recent congressional testimony from Federal Reserve Chairman Ben Bernanke demonstrates. Despite Mr. Bernanke's generally upbeat message on the Fed's official forecast, which calls for moderate economic growth of somewhere between 3.0% to 3.5% this year, the market and the media fixated on his acknowledgment that the outlook was "unusually uncertain." Those words have only reverberated in the past few weeks, bolstering economic pessimists.
There's a point at which pessimism becomes a self-fulfilling prophesy, scaring businesses away from investing or hiring. The dark tone of today's discourse is at risk of doing just that."
Better to lie to the people and create a happy go lucky america.
Get real, these people's lives depend on other people being in the markets and
spending beyond their means.
Try again Leo.
Ah, the good ole days when houses were ATMs, and home values were going to the moon!
http://www.youtube.com/watch?v=hn5EP9StlVA
The Matrix may not be real, but it feels so good. Leo, you should have taken the red pill.
"Try again Leo."
I prefer that he not.
You always gain credibility by using the work of Brian Westbury to support your thesis. America suffers from "Economic Hypochondria" - from the man who co-authored "The Recession Is Over" in May 2009!
http://www.forbes.com/2009/05/04/recovery-indicators-unemployment-opinio...
What's worse about Wesbury's acumen is that he was the recession-denier in 2008 that CNBC would trot out over and over again till the Greatness of the recession/depression convinced even TPTB that it was more than a slowdown.
I remember it well. Nothing more than a typical mid-cycle slowdown folks. Preaching the same message today - the pessimism over the economic outlook is all in your head.
I'm waiting for Leo and Westbury to start blaming our difficulties on the nattering nabobs of negativism....
For extra points do you remember which politician called us a bunch of whiners, before he left office and went to work in finance?
didn't the little SOB Rumsfeld say the same thing?
To be somewhat fair to Mr. Gramm, wasn't he responding to calls for government to save us all rather than disputing that there was a recession?
He was disputing the recession, but instead of calling it hypochondria, he was calling it a "mental recession." Same dynamic, blame the victim.
I was wrong about his status at the time he made the comment. He was advisor to John Mc Cain when he made his remarks, already out of office.
That would Mr Phil Gramm of Gramm Leech Bliley imfame and a co-sponsor of the Commodities Futures Modernization Act