So...is the economy getting better?

Parent Cafe
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<p>Watching it all, I struggle even more with the notion of “financial repression.” “Saver repression” and “bear suppression” make sense to me. Returns for the rationally risk averse investor are being depressed, no doubt about that. Yet it is an altogether different story for the financial speculator: Instead of repression, it’s Financial Liberation. Never has the investment landscape been so stacked against the saver and investor in favor of the speculator community.</p>

<p>[url=&lt;a href=“http://prudentbear.com/index.php/creditbubblebulletinview?art_id=10648]PrudentBear[/url”&gt;http://prudentbear.com/index.php/creditbubblebulletinview?art_id=10648]PrudentBear[/url</a>]</p>

<p>March 27 – New York Times (Binyamin Appelbaum): “In a speech that sought by turns to deflate optimism and pessimism about the labor market, the Federal Reserve chairman, Ben S. Bernanke, said Monday that the Fed’s efforts to stimulate growth were gradually reducing unemployment, but that the scale and duration of the problem could leave lasting scars on the economy. ‘Recent improvements are encouraging,’ he said. However, he continued, ‘millions of families continue to suffer the day-to-day hardships associated with not being able to find suitable employment… Because of its negative effects on workers’ skills and attachment to the labor force, long-term unemployment may ultimately reduce the productive capacity of our economy…’” </p>

<p>March 27 – Wall Street Journal (Jon Hilsenrath and Kristina Peterson): “Federal Reserve Chairman Ben Bernanke said the central bank’s easy-money policies are still needed to confront deep problems in the labor market, moving to reinforce his plan to keep interest rates low for years. His comments… were striking after several months of improvement in the jobs market. The comments also ran counter to a view that has emerged in financial markets recently that the Fed could back away from its low-interest-rate policies by next year.”</p>

<p>March 26 – Bloomberg (Nikolaj Gammeltoft and Whitney Kisling): “Hedge funds trailing the Standard & Poor’s 500 Index for the last five months are giving up on bearish bets and buying stocks at the fastest rate in two years. A gauge of hedge-fund bullishness measuring the proportion of bets that shares will rise climbed to 48.6 last week from 42 at the end of November 2011, the biggest increase since April 2010… The Bloomberg aggregate hedge fund index gained 1.4% last month, lagging behind the Standard & Poor’s 500 Index by 2.65 percentage points. Money managers struggling to catch up with the gains have contributed to the rally that pushed the S&P 500 up 27% since October…” </p>

<p>March 27 – Bloomberg (Prashant Gopal and John Gittelsohn): “Matthew and Carina Hensley offered $10,000 more than the asking price for a three-bedroom house in suburban Seattle, then lost out to one of seven other bidders. Their $270,000 proposal last month came with a family portrait and a letter introducing the couple, their eight-month- old daughter, Harper, and their desire to build a family in the Renton, Washington, house… Bidding wars, absent from most parts of the U.S. residential market since its peak in 2006, are erupting from Seattle and Silicon Valley to Miami and Washington, D.C. The inventory of homes hovers close to a six-year low, while an increase in jobs and record affordability are tempting more buyers. The number of contracts to buy previously owned homes jumped 14% in February from a year earlier…” </p>

<p>I wish that there was something like the Credit Bubble Bulletin for economics in terms of people, jobs, commodities, demand/supply, etc.</p>

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<p>Last fall ECRI said a recession was certain and suggested it would arrive shortly. It did not arrive shortly after their call and I think they will be wrong. Only if oil prices continue to go up dramatically will we go into recession in the US. Europe is already in recession or near recession. If China collapses that could also trigger a recession in the US, but that does not seem so likely. I am not aware of any economic indicator that ECRI might have that can predict oil prices a year out or the collapse of China a year out. I think they just got it wrong and are hoping the economy collapses to save their reputation.</p>

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<p>It was a Seeking Alpha article that had the ECRI stuff. I don’t have the link anymore.</p>

<p>The feeling that I got from Doug Noland’s bulletin this week (and he has a mildly bearish personality) is that the Fed will backstop the economy which may be why markets are relatively good this past week. I need to reassess more but I don’t have time this weekend.</p>

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<p>“The greatest lesson in life is to know that even fools are right sometimes.”</p>

<pre><code> W.Churchill
</code></pre>

<p>What I say, you just never know. Never.</p>

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<p>[The</a> Problem with the Fed?s Zero Rate Policy | Jim Rickards | FINANCIAL SENSE](<a href=“http://www.financialsense.com/contributors/jim-rickards/problem-with-feds-zero-rate-policy]The”>The Problem with the Fed’s Zero Rate Policy | Financial Sense)</p>

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<p>Geez…I have been saying this for several years…lol</p>

<p>Really nice link…</p>

<p>I guess I will just throw this in here too…</p>

<p><a href=“Austerity Is a Disaster: The Lesson of Europe's Record Unemployment - The Atlantic”>Austerity Is a Disaster: The Lesson of Europe's Record Unemployment - The Atlantic;

<p>“This should put to rest the notion of “expansionary austerity” – that is, that budget cuts can spur growth by giving businesses increased confidence. It has been an epic, epic failure with interest rates at zero. The more a country has cut, the more unemployment it has. Greece, Spain, Portugal and Ireland have all had markets (and Germany) force them to radically reduce deficits amidst already deep slumps. The result has been even deeper slumps. Joblessness has jumped to levels not seen in advanced countries since the 1930s.”</p>

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<p>What a surprise. Austerity doesn’t work.</p>

<p>:)</p>

<p>"The euro creates a world of bad choices. Austerity has made these bad choices worse. But the problem with austerity isn’t the euro. The problem with austerity is austerity. It doesn’t work. At least not in a world of zero interest rates. Just look at Great Britain. Despite controlling their own currency, their recovery has also lagged ours – a fact that Adam Posen of the Bank of England blames on premature fiscal retrenchment.*</p>

<p>Which is to say: a recovery is worth a deficit."</p>

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<p>A more subjective weekly updates on Economic Indicies</p>

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<p>So artloversplus…is the economy getting better?</p>

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<p>You tell me, you are the guru…I am just a cut and paster…:)</p>

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<p>Lol…</p>

<p>Your opinion…?</p>

<p>You can be wrong…it is ok… ;)</p>

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<p>its down down down down down////// am I wrong?</p>

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<p>That is incoherent.:)</p>

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<p>I have this mental image (I wish I could draw a cartoon)…</p>

<p>Bernanke is blowing up a giant balloon, and he keeps blowing and blowing and the balloon keeps getting bigger and bigger. Every time he blows into the balloon we cringe and wince, expecting the balloon to burst… but at least not this time, it just gets a little bigger. So we keep wincing with every breath, knowing that eventually the balloon will explode. We just don’t know how big he can get that balloon before it blows. If you have ever stood next to a person blowing up a balloon with the intention of continuing to blow it up until it explodes, it is a very uncomfortable feeling!</p>

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<p>That is an ugly mental image…</p>

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<p>We are certainly the best house in a rotten neighborhood. The problem with this recovery is that housing is not leading us out while typically its the first component of an improving economy.</p>

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<p>That balloon was bursted in 2008, now they started another, this time it is flat and with little air, at leaset for now.</p>

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<p>You need a lot of jobs (or a huge number of investors that aren’t in it just for the flip) to get housing started again. In past recoveries, we had strong job growth along with pent-up demand from consumers that were sick and tired of being frugal to get things going again.</p>

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<p>Housing in our area is doing pretty well, from what we can see. The rest of the economy is not doing so well here. Our potholes, streets and infrastructure continue to be an embarassment.</p>

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<p>Apparently the fed seems to think that things are getting better - then the market sells off - erratic behavior to say the least. Its no wonder that retail investors are keeping their money out of the market.</p>