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Optimism About A Recovery Starting To Fizzle [The Worst Is Yet To Come?]
MSNBC ^ | August 17, 2009

Posted on 08/17/2009 11:55:13 AM PDT by Steelfish

Optimism about a recovery starting to fizzle Observers expect stocks’ rally to end as economic reality starts to set in

Aug. 17: As stocks see their biggest drop in more than a month, a CNBC panel discusses if this sell-off could be the beginning of a more significant market correction. CNBC

John W. Schoen Senior producer,msnbc

What happened to all the optimism?

Less than a week ago, many people were celebrating the beginning of the recovery. The Federal Reserve itself claimed the economy is “leveling out.”

Now some investors and market watchers say the stock market may have overestimated the prospects for an economic rebound — and share prices could be due for a bigger pullback after a 50 percent surge since March.

"The market has gotten way ahead of the reality on the ground,” Pimco's Mohamed El-Erian, co-chief executive officer of the largest bond fund manager in the world, told CNBC Friday. "We are yet to see a durable and sustainable recovery, but the market has gotten ahead of the process by pricing that in."

On Monday, some investors echoed those second thoughts, sending stocks 2 percent lower and stalling a rally that had pushed the market up 15 percent since mid-July.

The initial exuberance followed economic data over the past few weeks showing that one of the worst recessions since World War II many be ending. Job losses slowed in July. Many forecasters believe the U.S. Gross Domestic Product will likely turn positive again in the third quarter after steep declines since the recession began in Dec. 2007.

The relentless retreat of housing prices seems to be slowing. And massive infusions of government cash — the $787 billion economic stimulus package, the $700 billion bank bailout and the Federal Reserve's $1 trillion intervention in the financial markets —

(Excerpt) Read more at msnbc.msn.com ...


TOPICS: Business/Economy; News/Current Events
KEYWORDS: fizzle; optimism; thecomingdepression
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To: Steelfish
WHERE"S MY GREEN SHOOTS! I WAS PROMISE GREEN SHOOTS!

21 posted on 08/17/2009 12:20:39 PM PDT by Kartographer (".. we mutually pledge to each other our lives, our fortunes, and our sacred honor.")
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To: Steelfish
Notice the rally before the crash...

22 posted on 08/17/2009 12:26:38 PM PDT by TSgt (I long for Norman Rockwell's America.)
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To: ari-freedom
FDR = misguided American
Obama = America Hating Marxist

That sums it up in my opinion!

23 posted on 08/17/2009 12:27:39 PM PDT by precisionshootist
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To: Mamzelle

If there is no value in the market then those bankers are “making money” off the backs of naive investors.


24 posted on 08/17/2009 12:29:13 PM PDT by saganite (What would Sully do?)
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To: Steelfish

Face it...the big money on the left was inflating the market long enough to try to ram health care through. They can’t keep it up forever.


25 posted on 08/17/2009 12:31:46 PM PDT by ez ("Abashed the devil stood and felt how awful goodness is." - Milton)
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To: tcrlaf

Speaking of ‘wealth’.
Discuss....
The current situation is due to an emphasis on ‘value capture’. (Or Stealing From Each Other) Wall Street, Government, F.I.R.E. economy taking value from one but not returning value to producer. Eventually, like a ponzi scheme, you run out of other people’s money.
The real method of producing ‘wealth’ is ‘value creation’.
(or making something valuable and trading it for equal value) REAL ‘spreading the wealth’. All sides win! Labor, raw materials, capital equal productivity noone looses.
If you apply these hypothesis to economic principles, could you answer the problems in our current dilema?
Could the ‘Free Market’ function again if the directive was to ‘create value’?


26 posted on 08/17/2009 12:33:46 PM PDT by griswold3
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To: Steelfish

Is there a treasury auction soon? Seems each time there is one, the market goes down and everyone rushes to ‘secure’ Treasuries!


27 posted on 08/17/2009 12:35:20 PM PDT by griswold3
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To: tcrlaf

What about agriculture?


28 posted on 08/17/2009 12:58:53 PM PDT by I-ambush (I didn't think, I never dreamed, that I would be around to see it all come true-McCartney and Wings)
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