Economic Anticipation
SEARCH BLOG: ECONOMY
In recent weeks, there has been nearly an 1,800 point recovery in the Dow Jones Industrial Average from 6547 to over 8200... going over 8300 this morning... 26%. At the same time, the price of oil has gone from about $46 per barrel to $53 per barrel... 15%.
When you compare that with other economic indicators such as national unemployment which rose from 7.6% to 8.5% [Jan. through Mar.] or ...
you begin to appreciate that, as a nation, we are hoping for change... and willing to bet our remaining dollars that it will be positive change.Ranks of Discouraged Workers and Others Marginally Attached to the Labor Force Rise During Recession
The number of persons who were marginally attached to the labor force increased sharply during the current recession.
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History may be on our side. Despite the fact that industrial icons such as General Motors and Chrysler may be in deep financial distress which may lead to a partial collapse of the domestic auto industry, there is confidence by Wall Street and oil traders that there will be plenty of cars and trucks being sold and driven to warrant their optimism.
Nevertheless, it may be prudent to recognize what can happen when the rug is pulled out. Gary Indiana was a thriving area until the domestic steel industry collapsed.
Detroit Michigan is collapsing as the automotive industry collapses.
But when the basis of a country's economy becomes porous and deficient... banks collapse, investments collapse, savings disappear... even whole countries can run into more than a "recesssion"...
There are tipping points. The U.S. economy has not reached a tipping point, but there are large "wobbles" in several sectors. Growth in health care services is not a future saver, it is more like a snake eating its tail... as is greater and greater national debt. Sooner or later payment comes due. When the Garys and Detroits fail, the economic infection can spread.
Rather than increasing the difficulty of doing business in the U.S., our local, state, and federal governments need to address the regulatory, tax, and policy burdens that lead to the destruction of the Garys and Detroits. Iceland is an example of a nation that looked to financial manipulation as its future... and got the future that comes with it.
Our country is putting more and more of its eggs into the federal government basket with the hope that the economy will respond well to the dictates of that government... or the fear that the dictate will be to go into bankruptcy.
The question is whether this rise in the DJIA and oil prices portends a better future or is simply irrational optimism. Let's hope it is the former. Regionally, in Michigan, it is the latter.
Oil prices ease after rally..
Futures fall below $53 a barrel as positive economic news vies with weak demand and supply concerns.
NEW YORK (CNNMoney.com) -- Oil prices fell Monday morning, after a big rally in the previous session, as investors weighed positive economic signs against ongoing concerns about weak demand and record-high inventories.
Light, sweet crude for June delivery was down 49 cents to $52.71 a barrel in pre-market, electronic trading. The contract jumped more than $2 a barrel Friday.
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