No no, you're right. It IS confrontational. But you're telling me that I'm out of touch, delusional, depressed, etc. Any why? Because I insist that traders trade the day and make money doing it regardless of up or down moves? You claim you're "kicking my ass" when the market goes up. How is that when I go long or short as the market moves? I could go on and on with your claims, but almost all of them are incorrect. Anyone who shorts the market on a down day is NOT necessarily a bear.
Recession was an unpopular reality TV show. It has now been canceled. Tonight on The History Channel: Germany, 1933.
For some, we've been in a recession for the past 7 years in terms of real wages: Source: Real wages decline in 2007
everything is just wonderful. there is nothing wrong. its all in your imagination. barry I'LL SAY IT AGAIN, I'M A GRIZZLY BEAR !
Regarding the gov's actions: Is the gov giving away money directly to the people gonna increase spending? Yes, probably. However, since that money is not coming from an increase in productivity [aka, the people are not receiving that money because they produced more goods and services] then the available goods and services won't grow alongside spending. When that happens, you get inflation. When you lower interest rates, you stimulate the economy, you sacrifice inflation for growth. A couple of words on inflation. First, a definition; Von Misses defined inflation as the artificial increase in monetary supply that causes a generalized increase in the prices of good and services. Inflation is particularly hard on the working class, as it erodes their salaries along with their paychecks [when they have a job, of course]. Also, as you inflate your currency it losses relative value against other currencies and goods that remain scarce. So imports become more and more expensive [not a good thing when you're running huge trade deficits, that won't sort themselves out easily as prices of imported goods begin to rise] The tricky thing with inflation, is that it doesn't show it's ugly face right away, you need at least 6 months for it to be reflected in prices of good and services. Regarding your analysis: There are 2 options. 1 you're correct, 2 you're incorrect. 1. If you're right on your analysis and there is no recession coming, or anywhere near. Then we have a problem, since all of Bernanke's rate cuts, along with Bush's brilliant give away is going into inflation. In that case, inflation goes mostly in capital goods, such as houses, cars etc. and in smaller proportion into consumer goods, food and such... Because capital goods are much more elastic than consumer goods... Eroding the buying power of consumers, and diminishing the relative value of the dollar against other goods and currencies. You may get an over acceleration, that may cause damages all over the economy, making it much less efficient. This in turn decreases relative productivity, creating an inflationary spiral. If you're right on your analysis, then the measures taken by the government are unnecessary and will hurt the people's pockets, running the risk of overheating the economy. 2. If your analysis is incorrect and there is a recession around the corner, then Bernanke's rate cuts and Bush's voodoo economic measures will still cause inflation. But, as people are out of a job, they don't go buying new houses and other capital goods. They try to save what little money they can get for goods that are more important to their survival [consumer goods]. This causes the relative prices of consumer goods to fall at a lower pace than the prices of capital goods, since demand for food is less elastic than demand for cars. You get stagflation. If your analysis is incorrect, then Bush policies will only make matters worse. Mixing the worse elements of recession and over acceleration. Bush seems to think that he can throw money at the market every time it moves down, the problem is that every dollar you throw at the market is less effective than the previous one at accelerating the production, and is more effective than the previous one at accelerating inflation. Once you get to the point of saturation, the injections of liquidity will cause the market to rise at a smaller rate than the dollar loses value, then you get into an inflationary spiral. So regardless of recession, having someone printing money at a fast pace and throwing it to the economy, is not a good idea. It won't make the deficits go away, it might actually make them larger. It won't make the war go away, but it might affect your ability to pay for it. and it won't make banks or lenders practice better risk management, but it might make them think that they can take stupid risks trusting the gov is going to bail them out.
day is right about one thing, things are different from the last time (2000-03). The last downfraft was a result of valuations, this one is much worse, derivatives. There is simply no way to quantify how much bad paper is out there. The notion of the banks bailing out the mbi's of the world makes it even worse. We may not be in a recession to the exact wording, but I think i'd rather have 2 quarters of negative growth, compared to the time bombs sitting out there.