SEARCH BLOG: ECONOMY
Bill and I talked recently. He is not happy with the Obama administration for a number of reasons, but his biggest concern was a "W" recession... a false recovery followed by another sharp downturn. More than that, he could see that happening in the stock market and is keeping his money on the side.
Smart fellow, I think. Meanwhile...
I wrote this last month and don't see any reason to change my evaluation of the situation yet:
NEW YORK (CNNMoney.com) -- Stocks slumped Monday as weaker oil prices and more geopolitical unrest raised worries that the recession may not be waning as soon as some had hoped.
The Dow Jones industrial average (INDU) lost 187 points, or 2.1%. After ending last week in positive territory, the Dow is now back in the red for 2009.
Wall Street has been steadily rising for three months on bets that the pace of the recession is waning, with the S&P 500 up 40% during that period. But a lack of new evidence to support the rally has left stocks rangebound over the last few weeks.
"People are re-evaluating the run up," said Kim Caughey, senior equity analyst at Fort Pitt Capital Group.
I'm still not sure what hope I am to have from all of this change. But don't worry; China will buy our debt and continue to subsidize us... or will they?
- Unemployment has not peaked and the "hunker down" mentality is increasing which will have a suppressing effect on the economy
- The economy has yet to feel the impact of General Motors and Chrysler declaring bankruptcy... and the bankruptcy court decisions that will ripple through the supplier base and have a suppressing effect on the economy
- Oil prices have gone up over $15 per barrel from their lows and that will have a suppressing effect on the economy
- The federal government's deficit spending increases will lead to either or both tax increases and higher inflation which will prompt the Federal Reserve to raise interest rates... all of which will have a suppressing effect on the economy
- Federal energy policies are being pushed by Energy and Commerce Chairman Henry Waxman that will dramatically increase the cost of energy and create burdens on domestic manufacturers which will have a suppressing effect on the economy