Posted on 08/03/2010 10:58:10 AM PDT by blam
Why Are Markets Ignoring The Obvious U.S. Slow Down As If It's Nothing?
Vincent Fernando, CFA
Aug. 3, 2010, 1:24 PM
The U.S. economy has clearly slowed from its earlier 5.6% clip in Q4 2009. GDP growth for the second quarter of 2010 was reported last at 2.4%. Why haven't markets tanked? Aren't we also seeing many growth indicators easing back? Isn't the slow-down obvious?
If you haven't had these concerns, the FT's Econoclast at least has:
Today’s US personal spending and income figures for June suggest that the underlying growth of real consumer spending has slowed to around 1.5 per cent per annum, which is consistent with the sluggish GDP growth rate suggested by yesterday’s ISM survey. Yet global equities have recently eliminated the losses which they suffered when the European debt crisis was at its peak in April and May, and equities are now slightly up on the year.
What is going on?
...
So the markets appear to be taking the view that other countries are able to withstand the slowdown in the US, and if all else fails, then the Chinese government and the Federal Reserve will come to the rescue. Surely they are not just whistling in the dark - are they?
That's one interpretation -- blame the plunge protection team for rallies or lack of a crash.
Another interpretation of the market's apparent complacency is that the economic slow-down we're seeing now was already expected. Even at the beginning fo 2010, few expected U.S. GDP growth to maintain its late 2009 rate of expansion.
As Barron's summed up nicely this weekend:
The slowdown in GDP growth, to an annual rate of 2.4% in second quarter 2010, tells us nothing decisive about prospects for the second half.
[snip]
(Excerpt) Read more at businessinsider.com ...
Pension
Surely this cannot be a serious publication. The answer is that the Marxists have coopted the financial and media leadership and are coconspiritors in Onada’s economic propaganda campaign.
Because of Quantitative Easing Part II
did they not get most of the bailout money?
The market goes up because it was down, and goes down because it was up. 10 years from now it will be at 10K on the DOW, even if it hits 15K and 7K in between.
The markets are going up because things will change in November. And earnings look pretty good, for the most part.
Its all control
Bubble bubble toil and trouble.
Maybe....
The stock market has changed from what it once was. It’s no longer an accurate prognosticator for the future economy. It no longer cares about earnings (Companies routinely set guidance for earnings low, then celebrate when their earnings beat the low estimate). It pretends news headlines to be real (the spin variety). It no longer is a safe place for even a conservative investor (GM, Lehman, Enron, etc)
It appears to be a heavily manipulated market place, similar to a rigged casino.
The stock market is now just another extension of the Government, like the Fed.
“because the Federal Reserve and their buddies Goldman Sachs, Morgan Stanley, Merrill Lynch, JPMorgan Chase and other Wall Street heavyweights are propping the market up.”
until they can get out, then the bottom will fall out and the suckers get screwed....red
Federal Reserve - Intentionally Causing Economic Crisis!
http://www.youtube.com/watch?v=GFxZDTAXEhg&videos=duU_nzH0tn4
Conquering the Spirit of Debt
48:56 - 2 years ago
Conquering the Spirit of Debt This amazing sermon given in Sept 2003 by Pastor
Rod Parsley at Breakthrough Church in Columbus Ohio
http://video.google.com/videoplay?docid=3051024550497129264#
that is the best you will here
The root of that productivity is fear but the market itself isn't fearful. The problem is that for there to be real growth, there must be confidence in the economy. There is no such thing as fear-driven growth.
After the election, just suddenly, market crashes and gas goes to $5-6 per gallon. Wait and see. The market is fake.
Goldman reveals where bailout cash went
http://www.usatoday.com/money/industries/banking/2010-07-24-goldman-bailout-cash_N.htm
I was told on here many times that the high gas prices were justified due to supply and demand. Surely they weren’t wrong and the free market is a joke.. right?
yes and just think of all the lives being destroyed..pension funds and childrens college funds but if you are UNION ...Obama will pick up the tab with our tax dollars which are shrinking...If we have to be content with making less money then so should he..he should certainly be content with spending less...of course Michelle may need another hunk of jewelry or silly party...at our expense..come to think of it..just like the clintons..they dont have a dime they didnt steal from taxpayers.
Corporations now have the ability to go wherever the labor force and other business environment factors are favorable to making profits. There is nothing morally wrong with this, by the way, and corporations should be free to do this. If a country, such as the U.S. wants to attract more corporate activity, then it has to change its business environment to do so.
The upshot of all this is that the U.S. economy, particularly on the jobs front, may continue to lag substantially while U.S. corporations still make money for their shareholders by increasing profits from overseas operations.
Therefore, U.S. corporations -- manufacturing and so on -- will NOT be the major job drivers for any recovery in the U.S. They might contribute to market gains for equity holders, but they will continue to grow jobs overseas. This means that SMALL BUSINESS, more than ever, is the last stand for creating jobs here in the U.S. Yet the Obama administration is crushing small business as never before in history.
The ONLY businesses that MUST hire U.S. workers are those too small or too regional in their products/services to go overseas. Again, this means "small" business.
Since corporations are growing their jobs overseas, and Obama is crushing small business here, the result will be a dismal jobs picture for many years to come.
And, oh BTW: once the Obama administration figures out that the only people participating in corporate profits are those who own stock -- even though something like 93% of Americans own some stock -- this will be spun as the "rich" partaking in "overseas profits" while greedy corporations "won't" create jobs at home. This will lead to efforts to confiscate overseas profits.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.