Thursday, April 30, 2009

Wall Street Says Bad News Is Good News

SEARCH BLOG: ECONOMY

As reported in The New York Times, bad news was treated as good news by Wall Street.

U.S. Economy in 2nd Straight Quarter of Steep Decline

Published: April 29, 2009

The economy contracted sharply in the first quarter of the year as businesses scaled back on investments and cut their stockpiles of unsold goods, the government reported on Wednesday. But the numbers suggested that the worst of the recession may be fading as the government’s stimulus filters into the economy.

Let me put my 2 cents in with Wall Street's billions since yesterday's trading seems to reinforce that perspective.

  • This recession will not be ended by housing construction... not with the glut of foreclosed homes available and the stockpile of owned homes with people anxious to sell.
  • This recession will not be ended by manufacturing which is in desperate shape with the effects of the auto industry blasting through the suppliers and related industries.
  • This recession will not be ended by social security recipients super-charging the economy with their $250 stimulus checks.
  • This recession will not be ended by the new intellectual-property based economy which is easily copied and usually is.
  • This recession will not be ended by the new "green" economy which will create more job losses in traditional energy resource suppliers that will be saddled with onerous taxes.
From what I can see, this recession will be over when Pres. Obama declares it to be over and he can focus on saving the planet and hugging those who detest the U.S. Or it will simply end gradually as the financial adjustments millions of individuals have made allow them to resume a more "normal" life... with a lot less savings.

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