Long reality, short the kool aid!
My goal for this blog is to possibly enlighten some people that non bipartisan attitudes are ruining the United States of America. Mostly, I will write and debate about the financial markets, and politics. There will probably be a few other areas covered such as sports, dry humor and music. Another topic that will pop up is how I believe many of the larger organized religions are moving the World toward World War III, with nuclear reprocussions.
An additional goal is to be able to analyze the structural and secular headwinds this Country is going headed towards, in an agnostic fashion. As the baby boomers move past their peak earnings years and entitlement programs get tapped beyond their resources, there are going to be some major changes to our society, in my opinion. Not to mention how the quality of education in this country has taken a nose dive the last 25 years or so. These are two of the main forces that have knocked the United States from the economic super power it was in the 20th century.Will it ever regain it's place on top? I am not leaning in that direction, but maybe through some serious homework we will be able to see the forest through the trees. I honestly hope so!
Talk about your plenty, talk about your ills
One man gathers what another man spills.
Robert Hunter
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Lets use the S&P 500, as our benchmark. The Dow Jones Industrial Average is just 30 stocks and antiquated. Like it says, its an industrial average and when don't have an industrial based economy, anymore.
ReplyDeleteSome say we are now have a services based economy, but I believe that ended in 2000. Now the United States has an asset based economy, which is bad.
Stocks are at 9 month highs. Some are pointing to how the 2nd quarter GDP (gross domestic product) only contracted by 1% in the 2nd quarter, of 2009. While stocks are an instant discount mechanism, which look out 6 to 9 months, it does get over and undervaluated from time to time. Some suggest this rally is a precursor, to the longest recession, since the 2nd World War, is over. There were some devil in the details, in how the Government came up with such a small contraction. (imo, the BEA (bureau of economic advisors and the BLS (bureau of labor statisics, are not to be trusted.) Lets take a peak:
Private investment declined by -20.4% with fixed investment having declined 13.5%, residential investment declining by 29.3% and business investment having declined by -8.9%. imports fell dramatically faster than exports – 15.1% versus 7% respectively (so consuming less added to GDP, got that? ;-).......government expenditure rose by 10.9% (is that economic growth or binging on a credit card?)
So, does perception become reality and the economy actually starts to grow organically? Or does it shortly revert back to the double dip, as the economic meltdown continues? I hope for the former, but am prepared for the latter.
we shall see, but clealy this headline number was not what some of the bulls, have been raving about.