ilene's blog

The response of the market makes sense from the perspective of Pavlovian conditioning.

Sales must increase. That is largely dependent on household formation, which in turn is dependent on growth in full time jobs. And that's not happening.

Perceptions have turned very negative and the media has been increasingly playing on fears (e.g. the U.S. debt ceiling crisis and the big default scare). If the economy gets so bad, and the stock market falls low enough, many believe the Fed will step in with another short term fix to prop up the stock market - QE3.

Where is the bottom?

Once abundant aquifers worldwide are being rapidly depleted, and resolving this is expensive and requires growth controls and sacrifice.

Consumers used to have discretionary income which they would use or not use depending on their mood. Beginning in 2008, consumers had less money but the price of commodities shot up and that has kept consumer spending high – but that doesn’t mean they are happy about it.

The model in my forecast says that meaningful reform to the status quo will not be readily accepted by the power elite. They will promote a 'new normal' which will span a leisurely 'five to ten years' for economic recovery, while they are comfortably standing above it all on other people's necks.

Don't just do something, stand there! 

This is a TERRIBLE market to be invested in.

Looking back at crashes of the past, there’s usually a day like today somewhere along the line before the thing has run its course.

Investors do not need a ratings agency to tell them what to think about the US sovereign debt status.

“Some wags are saying this downgrade is already built in, but with the level of cognitive dissonance in the market I say otherwise. I am sure all the government put mucky mucks are meeting over the weekend and are stirring and preparing their usual toxins to stem any blowback." (Russ Winter)

The market may be beginning to reflect not only a financial crash, but an economic one that has been under way since May.