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For Those Still Clinging To Hope, Here Is David Rosenberg: "This Is The Weakest Post-Recession Recovery On Record"
To all those fewer and fewer optimists who believe the economy may avoid a double dip (or alternatively suffer the realization it never really got out of the depression in the first place), David Rosenberg provides a glimpse just how tenuous the so-called recovery has been, even despite the unprecedented attempts by everyone at the top to shepherd the economy into growth at any cost, and the daily reminder from Ben Bernanke that risk is dead and the Fed will never let capital markets drop again. As for the future, Rosie asks the logical question: how is it that earnings are expected to grow by 20% in 2011, when it is becoming increasingly obvious that GDP growth next year will be negative?
From Gluskin Sheff's Breakfast with Dave:
Let’s look at the situation from a top-down view. We have seen real U.S. GDP growth average 3.2% at an annual rate during this statistical recovery from the 2009 bottom. Of that, 2.1 percentage points came from the inventory swing — or about two-thirds of the growth. The remaining 1.2% average annual growth rate of GDP excluding inventories — otherwise known as “real final sales” — is the weakest post-recession recovery on record. The weakest ever, despite a 10% deficit-to-GDP ratio, a debt-to-GDP ratio rapidly heading to 100%, a near zero Fed funds rate, record low mortgage rates, an unprecedented tripling in the size of the Fed balance sheet, shifting accounting rules to help rejuvenate profit growth in the financial sector, cheap and easy FHA financing to virtually anyone who wants to buy a home, relentless government pressure on banks to modify defaulted loans, and bailout stimulus galore (Fannie and Freddie are now de facto “Crown Corporations” and their stock still trades!!) — and with all that, all we get for our money is a paltry 1.2% growth rate in final sales. Yuk.
And, just in case it is still unclear, Rosie sees much pain in the future:
Well, what’s past is past. Where are we going? It's pretty clear from the manufacturing components of the last payroll report and the latest ISM index that the inventory cycle is either reaching its peak or it already has. The inventory plan components of the small business survey for June hardly pointed in the way of more contribution.
We can see from the latest auto sales reports that absent cash-for-clunkers, sales are, at best, stuck in neutral near 11 million annualized units at a time when replacement demand is closer to 14 million. That this is happening with auto loan rates down 40bps year-to-date and down 100bps over the past year attests to the view that motor vehicles, like housing, is working off years of excess consumption. At least the used car market is thriving, but that doesn’t end up adding a whole lot of jobs to the economy outside the car lot.
Speaking of housing, sales and mortgage purchase applications are hitting new lows despite mortgage rates at record lows and this also attests to the degree of excessive demand from the prior bubble that is still being worked off — not to mention the fact that when appropriately measured with the shadow inventory of foreclosed properties held off the market, we are talking about close to a two year backlog of unsold homes overhanging the outlook for residential real estate valuation. Commercial construction is beset by high and still-rising vacancy rates in the office and shopping centre space.
It would be nice to see an export boom but the overseas economies, to varying extents, are tightening either monetary or fiscal policy to rein in growth. China is certainly not going to be in the same position it was back in late 2008 in terms of being a leader on the policy front that could ignite a power surge for the global economy. In fact, we just saw the U.S trade deficit widen quite unexpectedly in May to an 18-month high and trigger a wave of downgrades to second-quarter GDP growth. The consumer is not exactly rolling over, but spending fatigue seems to be setting in, along with a natural rise in the personal savings rate, whenever a quick fix fiscal policy gimmick runs its course and expires.
Perhaps capital spending will be a lynchpin, but at 7% of GDP, at most it will contribute a handful of basis points to headline growth. It certainly doesn’t seem to be generating a whole lot of new jobs; however, corporate spending growth, along with a sharp eye on cost-cutting, you may want to stay long your Intel stock a while longer. But, what it means for the economy beyond tech capex probably isn't very much.
Then we come to the near-20% chunk of the economy, the government sector. Two-thirds of that comes from the beleaguered State and local government sector, which is in a full-fledged retrenchment mode as it cuts services, raises taxes, and lays off 10,000 employees month in and month out, to reverse the flow of red budgetary ink. This will likely persist well through 2011.
In addition, we now have the federal government, with 70% of the ballyhooed spending stimulus behind us. Look at the bright side, the President recently said at a town hall meeting — at least the unemployment rate didn’t go to 15% or 16%. Let’s uncork the champagne, folks! What a way to measure success — my kid got an F but at least they didn’t throw him out school.
Congress passes the laws anyway, and in a midterm election year, as always, the opinion polls hold sway for the incumbents — and the survey says, there is no more public appetite for more fiscal largesse. We’ll see the extent to which this sentiment shifts as three million unemployed Americans roll off the jobless benefits data (since Congress refused to go beyond 99 weeks of support) just in time for the holiday shopping season — lost transfer-income of up to $100 billion heading into the most critical time of the year for the retailing community. And then there are the tax hikes slated for 2011, whether they be income, capital, dividends, or death!
After contributing about two percentage points annually to OECD growth over the past two years, fiscal policy in the industrialized world is set to subtract a percentage point in the coming year. In a world of small numbers, that’s pretty big. In the U.S., the fiscal withdrawal will be closer to 1.5 percentage points of GDP. So, if the peak inventory contribution is behind us, and all we have left is a baseline growth trend in real final sales of 1.2%, then how does the economy not contract in the coming year — when the consensus expects to see peak earnings?
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What happened? One minute ago, EURUSD popped, Gold and Silver did too.
Goldman F***ing Sachs saw heavy short-selling in client accounts and has decided to rape them again?
buy the worst values above the asking price, sell only when necessary to rotate into securities that are worse values, as these are the best performers in the Geithner/Goldman/JPMorgan orchestrated short squeezes in which the banksters rape their clients
Recovery? Did I miss it? Guess I wasn't paying attention to the bankers checkbooks. The only recovery has been through the stock market. Companies collecting .gov money through the backdoor bailout. Main street....recovery is a word not many there/here can even spell.
buy stocks on leverage to prosper as the economy melts down! yeah.....
LOL - mrs santa claus romer touting huge job creation
Didn't she host Romper Room?
She reminds me of Mrs. Puff, (SpongeBob Squarepants).
Rosenberg a pessimist on the economy? What a new and interesting development. /sarcasm
He's becoming more and more like Nouriel Roubini. You can totally know what he's going to say without reading it.
Bearish, blah blah blah, everybody is going to die, blah blah blah, Weimar, Zimbabwe, Canned Hamz... blah blah blah...
Dow to 1000, blah blah blah... I was short through the biggest rally in history and people still give me credibility... blah blah blah...
Funny stuff, you questioning someone elses' credibility. You are lucky you don't have any actual money, or you would have gone broke shorting gold.
That's funny, because I said to go short when it was at 1220. And what's it at now? 1210?
So, really, I'd even still be in the black on that call. If I shorted at 1220, it'd STILL be less than that.
What of the people that were paying 1365 an ounce for the physical when it was at 1265?
Don't see them much anymore...
The spot price is 1245? That means I only have to pay 1345! Gold's on sale!!!
Ba ba ba booyaah!!!!! Buy buy buy, bitchez!
Maybe they changed their names after calling for gold to drop to triple digits shortly before it broke to new all time highs. Oh wait, that was you.
I only changed my name because zerohedge bans people from time to time that do not agree with "goled to 500000 an ounce bitchez!"
Anyway, gold hasn't been UP at all since I said to go short. I said to short it in November at 1220, and now it's 1210. Wow. What a race to the moon.
Meanwhile you morons that said it was going to 2000 are still here. Yet, gold is down since I said to short it, and is going further down.
Let's look at the facts, eh?
I said to short at 1220. It's 1210. I would have made less than 1%, but I'd still be in the black.
The other people here were buying physical at 1240, which probably cost them close to 1300 with the fees and shipping., because "gold was on sale"
They'd be down 90 bucks an ounce already, or close to 8%.
Meanwhile, I'm up 70% over last year going short in April and playing the VXX.
I guess I should have bought physical gold at 1300 an ounce though, right?
LOL.
Despite the best and sharpest minds yelling doom, I don't see how the powers can let the markets drop - even if its on no volume. I can't see it going much higher, but going back to march lows seem out of question to me.
How fed is going to have that implemented is anybody's guess - print baby print.
Now printing without fundamentals is a can of worms and the next question is what investment can you do with your hard earned money so that it doesn't go down the toilet. I keep asking that question to myself and the only answer I get is gold. I am not sure if anything else can preserve the value of my money.
I think you got banned because you're more pain than ass. Kick the obnoxious level down from 10 to 9.5 and you might keep your surname a little longer than usual...
I guess if your idea of fun is to bet a market where the dominant manipulator is every central bank in the world..................
1214. It peaked at 1219 today.
Some kinda Nostradamus here. Of course, if you had had money for a long time, your ass would have gone short at $1000 and you would have lost it all.
A fool and their money...
First, I don't mess around in the gold market. The people there are retarded.
Wow. 1219!
Yet, that's still below the 1220 where I said to go short in NOVEMBER.
And you people that were buying physical at 1220 THEN were STILL paying more than 1220.
I'd be in the green on my idea and you wouldn't.
Next, who said I don't have money? Why do you think I have the time to hassle people like you all day? Because I'm broke? LOL at you for assuming...
"a fool and their money buy GOLD bitchez!"
It's shiny, pretty, and you can hold it in your hand!!!!
I guess I should have bought gold at 1340 though, right? (like you did) I would have made tons of money that way!
My cost average for gold is under $800.
You don't have a job, or any money. You are either a student, or recently graduated. You've never invested a penny in your life. You've had everything given to you, and you think you're God's gift, even though you've never produced a damn thing.
You are less than nothing. Enjoy your life as a scumbag. I assure you that it will be a short one, as the poor tend to die violently and early, especially when they feel like they are entitled to things they haven't earned (like the adulation you so desperately crave from those who post here).
So you called a short at 1220, but you didn't short it yourself? Just asking.
wow you are so smart
I know. It's hard to come up with original ideas in a community where the biggest lemmings are the most popular.
Damn, I just described the entire United States.
What do all of these statements have in common?
Ba ba ba booyah!!!!!!
Who will be the next American Idol?
Housing will gain 15% a year from now to infinity!
Buy oil at 147 a barrel!
Buy gold at 1265 an ounce, and pay another 100 bucks for shipping and processing
Buy askjeeves.com stock at 2000 bucks a share!
Gold to 50000, bitchez!
Gee with comments like this Stevie Wonder can tell why you've been banned before. Obviously your homies on Yahoo Finance and CNBC are awaiting your return...
What is your point? Why do you even bother posting? If you don't like it here, why do you stick around?
I like contrary opinions and well-articulated arguments. But not tangential rants that devolve into name calling.
"It's hard to come up with original ideas in a community where the biggest lemmings are the most popular."
Incredible!!
Here we are on a blog populated by the small minority of bearishly inclined investors and we are said to be lemmings.
The vast majority of OPM managers are bullish.
It's nice to know that the existence of zerohedge is viewed as a contrary indicator by the big money. Keeps the delusions alive!
Team Obama's recovery math never worked. And the only thing that has worked ( so far ) is the momo play. Take away the government games and we is Japan on steroids.
true that
I actually think David is trying his hardest to be positive. Everything he says makes since.
The author's tone is about 900 basis points short of reality.
If real "anything", any indicator, absent .gov manipulation was taken into account, reality is quite hard right now.
Hard things break. Too much fat in the system for it to survive choking on itself. Emperor has no clothes. Hasn't had any, mostly ever, barring a haze of deceit.
Recovery! Let's have a covery first.
Then we'll talk of re-covery.
ORI
http://aadivaahan.wordpress.com
Well, the government is slowly killing us anyway. If they step things up a notch they can cover the deficit through increases from the death tax!
Whoa! I don't know what's happened to me recently. I'm bitter, angry and upset. I suspect I have been reading too much truth here at ZH. Perhaps I just need to chill out with some American Idol or other carefully planned diversion to be happy.
I recommend The Biggest Loser. Nothing cheers me up like watching the morbidly obese crash-diet for my amusement.
I've been getting gnarly too.
Yesterday I honored my annual summons for jury duty. I was immediately drawn onto the jury panel by their super secret random selection model. The case was a trial for a couple of gangbangers ( those neck and knuckle tats are hard to hide ) who alledgedly killed another gangbanger in a botched drug deal. It was projected the trial would go 3-5 weeks........a real buzz kill for the jury pool.
My usual tactic to get excused is to try moderate and then default to total asshole if the former tactic fails, confident the prosecution or the public defender will 86 me after their jury suitability review. This time I musta' went over the top. I professed my broad distrust of government and went into a " justice is blind for the rich and sees 20-20 when you are not " rant. Got cut off by the judge and she tossed me in private.
I was thankful, but I have a hunch the defendants hated to see me go.
Just check the box saying you are a convicted felon. You won't need to even show up.
However you will be inundated by voter registration forms from the Democratic party.
"you will be inundated by voter registration forms from the Democratic party."
Or recruited by the Republican party to rape the poor...
How can jury selection be an efficient use of resources if everybody pulls the same shit? Dozens of people had to be pulled out of work in order to cope with what you did, and plenty of other people do. Widgets didn't get made, people will have to scrounge for cash.
I'm sure you don't care. It's an externality to you. But there's a reason why they call it a "civic duty". I really wish the right to vote was truly tied to the responsibility to pay taxes and fulfill your duties to jurisprudence. Justice is for everyone, and it might have truly been closer to blind had you stayed.
yes I am ashamed of myself.....but only a little.
Is there a way to short the US gov't?
TBT or TBF
Take as much debt as possible, convert into PM and then leave. Never to return.
It's time to forget the market and the government. It's time to go it alone, a new day. I propose we start with a new currency.-- I am thinking marshmallows.
While it is true, the marshmallow is in great supply, is easily created, and it is quite tasty, if you eat too many you'll get a gut ache.
But is it shiny, pretty, and can you hold it in your hand?
That seems to be a criteria for "real" currency. Otherwise, you just have fake currency that buys whatever you want.
true and if you have a wheelbarrow you can bring the fake money to a restaurant and buy dinner with it, at least in Zimbabwe.
http://humorland.wordmess.net/20081025/what-the-real-crisis-is-like/
You should give me all your fake money then, since it isn't worth anything.
Post your mailing address. I will be happy to send you a hundred billion Zimbabwe dollars. Remember, there was a time when a Zimbabwe dollar was worth three American dollars.
I thought ALL paper money was worthless?
I only take dollars, which have risen in value since 1985, despite your sky is falling tripe.
And yet they buy so much less of everything.
How can a human being be so stupid? Simple, they develop a theory and disregard any evidence contrary to it.
I mean, you had your dumb ass schooled on this very subject not two weeks ago. The USDX was 155 in 1985, now it's 83, damn near cut in half in terms of other paper currencies. It's purchasing power according to the government's own statistics has also been cut in half, but in REAL terms, it's down closer to 90%. Hell, even in gold, one oz gost $350 back then, 1200+ today. I mean, by what fucking measure has the dollar risen in value? Do you really have your head that far up your ass?
Risen in value since 1985?
Down less than 4% from the all time high is "slaughtered"?
You really don't have any money or actual experience in anything do you? Go back to playing Halo with your dorm buddies.
It's not 4% if you add in the money you pay to buy physical.
I don't live in a dorm, thanks.
What, you think the premium to buy and sell gold has disappeared, and people just transact at spot these days?
What a moron.
Well it's a dorm or the momma's basement. It's not like you sound like a guy who lives in a penthouse in Manhattan..
Well, I DO factor in ALL costs, and I can state that I'm up over 34%. And, I'm also up by about 11% trading the USD. These have been long positions. The trajectory is still holding fine, thank you!
The most volume in the past year occured about this time last year in mid July as people just gave up and went all in on stocks and especially banks. This low volume 7 day ramp is in my opinion being created as a buffer before the 1 year favorable cap gains tax rate is locked in the whole next month.
BLAH BLAH BLAH. The world is ending!! There is no recovery!!! BLAH BLAH BLAH.
This is a joke. You guys are just plain wrong. Things are never great for everybody. It doesn't matter how great the economy is, it is always tough for some people.
The economy is doing just fine for 90% of us. Sucks for the other 10% but the damn world isn't ending. Bad retail numbers? Who really gives a damn? Markets are up, no protesters are flooding the streets. I've not seen one recall petition for a single policitian. NOBODY GIVES A DAMN!! GOT IT?? NOBODY GIVES A DAMN!!
Go dig your hole in the ground and eat beans; stockpile gold and bullets. The rest of us will continue on with an ever increasing stock market and living the American Dream.
Man, this gloom and doom garbage must sell because it sure doesn't make any logical sense. Why don't one of you brilliant minds go ahead and tell me WHEN the dow will fall; WHEN the S&P will fall; WHEN there will be revolution. Otherwise you're just a whiney bunch of cry babies who have no damn idea of what is going to happen, sitting and sucking your thumbs while the good life passes you by.
By the way; yes Obama is a disaster for the private sector middle class. But they put him office, so screw them. Let 'em eat dirt if that was the best they can do. Life is hard but it is a damn sight harder when you're dumb. And the voting public in this country is as dumb as a box of rocks. Get used to it.
lol enjoy the attempts to reflate this bad boy while it lasts, this might be the biggest and last bubble of them all.
I live in a very affluent area. I go day to day without seeing how the majority lives. Last week, I stopped by an area formerly deemed up and coming. Lots of immigrants from South America. Walking the streets, it felt apocalyptic. So much despair. Closed stores. Empty restaurants and cafe's. Vagrants everywhere. Normal looking homeless people. It's getting very bad. You shouldn't be arrogant.
Listen to Yves Smith:
http://www.nakedcapitalism.com/2010/07/58-of-real-income-growth-since-19...
Today is Bastille Day. From Wiki:
http://en.wikipedia.org/wiki/Storming_of_the_Bastille
oh dear, you're a bit of a prick aren't you.
It's costing $2T a year for your 'only bad for 10%' fantasy. In the meantime your sooo busy making money cos you're smart the you cant see you are having your liberty and future ripped from you.
I must have missed the /sarc tag.
Lot's of people give a damn, man! The real unemployment rate is upwards to 17%, so your sucks/doesn't suck ratio is at least 20/80, based on unemployment alone. Loads of people have lost their homes. The life trajectories of unknown millions have been permanently altered. Lots of jobs are never coming back.
You lament the "doom and gloom", and ask to be told WHEN. If I see you sitting on a tree branch, and sawing it off behind you, I can't say WHEN you will crash to the ground, but I certainly know its coming. And I won't be rejoicing at the sight of your mangled carcass lying next to the tree, but I certainly won't be surprised to find it, either.
On the one hand you suggest things are great. On the other hand the middle class is both dumb and being ruined. How do you think that conflict will be resolved?
If you disagree with ppl here so much, why post?
I'm glad things are going well for you. I'm glad you are not one of the 40 million Americans on food stamps. The 25% of US homeowners with an underwater mortgage. Wait...I'm wasting my time...
"The economy is doing just fine for 90% of us. "
If things are good for you, then why are you here? Get back out there and sell your Hopium!
But I'm sure that everything was just fine for that insect one milisecond before hitting the windshield.
And speaking of dumb, clearly there are lots of folks who don't understand exponential growth (but they cheerlead for it anyway).
Thanks for playing!
Guess what? There will be no recovery under this communist President and his fellow travellers in Congress.
Seems awfully cosy with big business for a communist, don't you think?
Communist, state-owned, big business.
Communists are the same as fascists, just another form of authoritarianism.
Did you get your facts from Sean "How dare they question the commander in chief during a time of war?" Hannity?
Did you get them from Glenn "I'm a drunk asshole that draws bullshit on a chalkboard" Beck?
Or was it from Rush "Damn, I took so many drugs and masturbated that I'm deaf now" Limbaugh?
Either way, socialism and fascism are completely different.
Socialism is where the state runs business, and fascism is where the business runs the state.
You can't have both. We're fascist, not socialist.
I know your Dick Morris book told you differently, but that's what happens when people don't research.
I have never watched or listened to any of those people, but nice try at an ad hominem. Did you just learn about those in your communications class?
I wasn't aware that Hitler was not a member of the German government. I guess you learned that in your history class? Taught by some dumbassed liberal who thinks Communism is on the extreme left, and that fascism is on the extreme right. That's not how it is. Politics is not just left and right, its a compass. Socialism is the concentration of state power, whether those in charge favor the people (yeah right), the corporations (maybe), the banks, or just the party doesn't make any real difference. It's the difference between being lowered into boiling acid on your right side or your left side.
http://en.wikipedia.org/wiki/Fascism
http://en.wikipedia.org/wiki/Socialism
Hi tmosley-
Please do not fall into the trap of thinking that communism is the same as fascism because they are both socialist.
This is about economics. In a democracy, if the people are given the right to vote, they will always vote for their best interest, which means they will divide the wealth equally among all participants. That is the only result of that game if it is played by the rules by all involved.
In order to prevent this wealth transfer, you need a government to protect the wealthy from the common people. In a participatory government, you will have some socialism, there is no way around it. Socialism is when society redistributes wealth from the elite to the people.
Thus we have a Republic which gives some power to the people (socialism), but reserves the right to ignore them when it is necessary to protect the wealthy.
When you have a state that acts overtly in the interest of the wealthy against the majority of the people, you have a fascist state.
When you have a state that acts on behalf of the state for its own ends against all the people, you have something else, but it is not socialism.
Fred Hayak warned against socialism because that dependency could be used to create fascism or communism, but socialism is not fascism and communism.
well put
I am still hanging on to the "Hopey, Changey" thing.
LOL
http://news.yahoo.com/nphotos/President-Barack-Obama-Globe-Gazette-Deb-Vladimir-Lenin/photo//100713/480/urn_publicid_ap_org_c67ec42d88a747429e363da081d8d39c//s:/ap/us_iowa_obama_billboard
A hopeful sign of change?
As for the future, Rosie asks the logical question: how is it that earnings are expected to grow by 20% in 2011, when it is becoming increasingly obvious that GDP growth next year will be negative?
The magical concept of "growthiness"!
Inflation?
Am I the only one who uses GHCi to answer the math questions?
I have to laugh at the fiscal conservatives - we had insane monetary "growth" since 1971 or maybe before but that was OK because the bureaucracies in the banks were doing it but once the bureaucracies in the government were doing it that was bad.
The truth is both bureaucracies have had no idea how to create wealth for a long long time and are continuing to mistake economic growth with wealth and that is being charitable - the more intelligent sectors of both now hybridised groups have realised this for some time but have continued to extract wealth rather then build it.
They hope to extract wealth once again via fiscal austerity along the lines of the Volcker/Reagan two step but are continuing to buy Gold if that does not work out.
I believe that this time it won't and the coming decade or two will bring the dark ages back once more - but this time its for keeps.
Rosie is the best. However, I don't think his outlook is gloomy enough. Remember, we don't know what the Fed and the Feds will do in the coming months. Based on their history, I look for more problems.
He still needs to keep his job. He can't sound like a kook - and run around telling people to sell stocks and buy PM's and bullets.
Just sit back...ALL... and enjoy the "recovery-less recovery"
Love it!
My kid got an 'F' but least they didn't kick him out of school!
So. Everythings good?
Is Gully on vacation?
Johnny Bravo obviously 'Sudden Debt' old banned name as he routinely racks up 15 or so flags for every comment. Now he's lathered up into a real frenzy and wont hear any economic bad news as he busily posts 20+ responses to ever article...give it a rest clownass.
The whoel political class is responsible for this.
To paraphrase one of Reagan's great quotes...Government IS the problem.
"To paraphrase one of Reagan's great quotes...Government IS the problem."
Yeah, and Reagan should know all about that, as he's as responsible as anyone else. But... it played well to a bunch of suckers!
Here's the more credible slam:
“The chief cause of problems is solutions.”
- Eric Sevareid
This is universal, it works for government AND for business (like Monsanto or DOW for instance).
If one sticks to govt bashing then one is likely a cheerleader for big business (also holds for the other way round). Which is why I slam BIG everything! (BIG (other than Mother Nature) = FAIL)
When things things don't go to plan, management and government can be
remarkably persistent.
This is otherwise known as - The Corporate Approach to Dead Horses .....
The tribal wisdom of the Dakota Indians, passed on from one generation to the
next, says that when you discover that you are riding a dead horse, the best
strategy is to dismount. But in modern business (education and
government), because heavy investment factors are taken into consideration,
other strategies are often tried with dead horses, including the following:
1. Buying a stronger whip.
2. Changing riders.
3. Threatening the horse with termination.
4. Appointing a committee to study the horse.
5. Arranging to visit other sites to see how they ride dead horses.
6. Lowering the standards so that dead horses can be included.
7. Reclassifying the dead horse as "living-impaired".
8. Hiring outside contractors to ride the dead horse.
9. Harnessing several dead horses together to increase speed.
10. Providing additional funding and/or training to increase the dead horse's
performance.
11. Doing a productivity study to see if lighter riders would improve the dead
horse's performance.
12. Declaring that the dead horse carries lower overhead and therefore
contributes more to the bottom line than some other horses.
13. Rewriting the expected performance requirements for all horses.
14. Promoting the dead horse to a supervisory position.
That old magical equation of mv=py=GDP give or take imports/exports still sums it up nicely. Not only is the money supply on the verge of dropping but v shows no sign of going positive. So QE2 is a given, no doubt about it.
I fail to see how this game ends without a major overhaul of the entire system of taxation, world trade, currency controls,relative components of the economy etc. And only a huge world wide crisis could lead to those measures with the messed up political system you have down there.
Obama is correct with respect to the need to drive exports but I don't think your kids would be happy to make toasters for a $200/month wage when they could become part of the problem instead as a lawyer or doctor bilking the system for $15,000/month in wealth destruction otherwise. An economy mired in stagnation still running up a $42B trade deficit a month is one sick puppy. Thats the signs of a nation on the verge of collapse. Just my $0.02 worth from north of the 49th. (Meanwhile I can't find a decent candidate to fill a job vacancy (mining engineer) I've got paying $90,000/year to extract and send resources to Asia).
Good luck and bon voyage.
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