Author: Bob Hoye
Posted: Jan 22, 2012
"The Worst Economic Recovery Since The Great Depression"– Forbes, January 12
This emphasizes our thesis that the big action to 2007 accomplished another great Financial Mania. The first example was the infamous South Sea Bubble of 1720 and the fifth was the equally infamous 1929 Bubble.
One of the main features of every long post-bubble contraction has been that the first recession starts virtually with the collapse of speculation and it is severe. After denying it could happen, the economic establishment has been candid in describing it as the worst recession since the 1930s. Some have called it the "Great Recession". The continuing feature of the typical post-bubble contraction has been that each recovery is weak and each recession severe.
The article continued with "America has suffered the longest period of unemployment near 9% or above since the 'Great Depression'. Real wages have been falling under Obama and his confused, throwback, Keynesian/neo- Marxist Obmanomics."
Harsh condemnation of Obama's policies with comparisons to Marx are appropriate. Inappropriate is the term "confusion". He has been intentionally following Alinsky's Rules for Radicals which intends to destroy the US economy by overwhelming the welfare system.
No confusion at all.
Separately, the Census Bureau reports that the real median family income has slumped all the way back to 1996 levels.
Over the past few years, the number of government employees and their compensation rates have been increasing.
It will soon be time for the next phase of reforming government excesses.
The past week or so included a number of reports about Sovereign Debt downgrades. On the other side, there's endless confidence that central bankers and politicians (all advised by interventionist economists) can provide the perfectly-timed stimulus.
Despite this, markets for corporate bonds, stocks and commodities as well as the long bond remained positive. With some swings this has been possible through January.
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This is the dreadful time of year when everyone in our business publishes an outlook for the whole year. It is also the time of year when treasurers at the major gold mining companies would like to know the average price for the year. Fund managers are not so much interested in the average price in the S&P for the year, but what it will be at the end of the year.
Unless the trend of whatever is going on is going to run through the year, we won't have a forecast on where the market will be at the end of December.
Instead our focus is upon the stock market recovery that was expected to begin in early October and run to around January.
We have been looking for the choppy but positive action to run well into January. As noted in our Pivot of two weeks ago we are getting to the time when most of the good can be accomplished. A couple of our indicators were giving early "alerts". And given the nature of today's markets the completion of the move could be lively.
