Frowning takes 68 muscles.
Smiling takes 6.
Pulling this trigger takes 2.
I'm lazy.
Posted on 08/03/2010 10:58:10 AM PDT by blam
Why Are Markets Ignoring The Obvious U.S. Slow Down As If It's Nothing?
Vincent Fernando, CFA
Aug. 3, 2010, 1:24 PM
The U.S. economy has clearly slowed from its earlier 5.6% clip in Q4 2009. GDP growth for the second quarter of 2010 was reported last at 2.4%. Why haven't markets tanked? Aren't we also seeing many growth indicators easing back? Isn't the slow-down obvious?
If you haven't had these concerns, the FT's Econoclast at least has:
Today’s US personal spending and income figures for June suggest that the underlying growth of real consumer spending has slowed to around 1.5 per cent per annum, which is consistent with the sluggish GDP growth rate suggested by yesterday’s ISM survey. Yet global equities have recently eliminated the losses which they suffered when the European debt crisis was at its peak in April and May, and equities are now slightly up on the year.
What is going on?
...
So the markets appear to be taking the view that other countries are able to withstand the slowdown in the US, and if all else fails, then the Chinese government and the Federal Reserve will come to the rescue. Surely they are not just whistling in the dark - are they?
That's one interpretation -- blame the plunge protection team for rallies or lack of a crash.
Another interpretation of the market's apparent complacency is that the economic slow-down we're seeing now was already expected. Even at the beginning fo 2010, few expected U.S. GDP growth to maintain its late 2009 rate of expansion.
As Barron's summed up nicely this weekend:
The slowdown in GDP growth, to an annual rate of 2.4% in second quarter 2010, tells us nothing decisive about prospects for the second half.
[snip]
(Excerpt) Read more at businessinsider.com ...
Where is the head up his ass man?
because the Federal Reserve and their buddies Goldman Sachs, Morgan Stanley, Merrill Lynch, JPMorgan Chase and other Wall Street heavyweights are propping the market up.
Yes, they are, and don't call me Shirley.
Obama Adviser’s Green Manifesto: Americans Will Be Better Off When They Work, Produce and Earn Less
http://www.humanevents.com/article.php?id=38359
“Bear rally”, mark my words!
They are sucking the little guys in and when they are ready they will pull their money and crash the system. They will then buy everything on the cheap!
Same reason that gas was mysteriously $4+ @ gallon just sixty days out of the election.
It’s all BULLSH*T!
Why?
Stay away from Wall Casino Street!
.
Of course, dear friends, what we are witnessing is the next bubble. Corporations will rack up massive amounts of cash through the dual mechanisms of being able to float bonds and ridiculously low rates and by continuing to cut expenses and not replace workers. They're already sitting on nearly 2 trillion in cash and that is going to just keep going up and up and up ... until the bubble bursts.
How does the bubble burst? Not entirely sure, one never knows about bubbles. It can play out so many dangerous ways. Maybe the economy really does start to pick up, then all those corporations try to spend all that cash at once, causing hyperinflation. That wipes out all the schmucks who bought that corporate debt at ridiculously low interest rates, so the entire bond market crashes and credit dries up. The big companies are sitting on their hoards but the smaller companies who provide most of the jobs don't have access to the bond markets, do they?
Or maybe we fall into massive deflation. Then those ridiculously low rates don't look so ridiculous anymore because the bond holders will in effect be paid back with money that has *more* buying power than what they lent. Now its the borrowers who have the raw deal...
The fact is, the quantitative easing doesn't solve anything, it just causes a bubble to appear somewhere else in the economy, with even more detrimental results when that bubble inevitably bursts.
...and why would that be?
We may have some corrections, but why would people sell off if they expect Obama's programs to be checked?
I think part of it has to do with productivity: reluctant to hire, businesses are finding that employees are working harder. The market likes productivity.
The markets will do whatever they have to to fake out the majority then take their money.....
expecting a dive this month...
It doesn’t matter until it matters.
Short answer: man’s mind has become unhinged.
... as they slowly add to their short positions.
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