Deepest European Recession Since WW2 Not a Big Deal
According to the Drudge Report, the Eurozone is in the deepest recession since world war two.
However, just two hours later the headline was pulled and replaced with minutiae such as Michael Phelps and Michelle Obama. I guess that means the deepest European recession since World War 2 just isn’t such a big deal, or at least not as important as Michael Phelp’s records. Why?
For one, the GDP numbers were released last Friday and the market’s reaction was muted
(because these numbers were already expected)
It’s ironic how the Eurozone is in a deeper recession than the United States despite having much higher personal savings rates. Aren’t we suppose to be the stupid, irresponsible ones who ‘got everyone into this mess’? So why is the United States running laps around Europe? In the United States our recoveries are ‘V shaped’ unlike that of Japan, France, or Germany whose economies are bogged down by fiscal conservativeness, consumer frugality, welfare programs, employer regulation, and higher taxes.
Stocks are gonna surge next week. That’s why you need to buy GOOG AAPL MA V BIDU RIMM EWZ
FXI and make money instead of being a loser who sites on the sidelines watching other people
make money. The fake financial crisis is over. The mental recession ended after 16 months, four to eight months shy of earlier estimates.
Is Meredith Whitney a One Trick Pony?
Meridith’s Claim to fame was was writing a pessimistic, but accurate, report on Citigroup, on Oct. 31, 2007, which got her attention from many Wall Street analysts, and news media. To capitalize on her new found glory on February 18th she left her sell side job at Oppenheimer to start her own firm.
She appears frequently on CNBC, Fox Business and Bloomberg News programs.
Here are some of her recent statements from a CNBC appearance
I’m afraid she’ll be eating her words. Her latest screed is nothing more than a aggregation of leftist platitudes. Economics and sociology don’t mix. If main street is suffering that doesn’t mean wall street has to suffer, too.
Some of here statements are just plain stupid such as
expected and you?re still going to have consumers not spend money ?
Huh? Ever hear of the i phone? Who’s buying them? Consumers. How about net books? Consumers. Has she ever looked at a chart or is she too busy putting on mascara?
If her professional duty is to destroy wealth, yes, she’s doing a good job of it. Her initial report triggered this whole bear market costing investors billions, so you can understand why some people don’t like her too much. As this bull market propagates her underwater investors will demand an explanation, and she’ll have no resource but to disclose her ineptness.
On a related note, I’m none too fond of Krugman or Roubini.
How the Day Will End
Being that I am very wise I have an uncanny ability to predict the stock market and economics.
This screenshot was taken today when the DJIA was down .55% at around 10:20 AM pacific time. The squiggles indicate the potential paths the market can take for the remainder of the day. Buy Google AAPL MA POT V BIDU EWZ on this dip and make money.
Debunking Hyperinflation
James Bibbings recently wrote a great article about how inflation isn’t a concern regarding the bailouts and stimulus.
here are some of the more pertinent points:
Due to the incredible level of credit contraction within the US, most of the money being put into the banking system by the government is not making it back into the economy. In general, banks are acting as they should by evaluating the overall lending risks in our economy and implementing tighter (more appropriate) lending standards. Under this regime few are willing to borrow and banks are also now unwilling to lend. Also under this ideology the printing presses could (in theory) run all day and nothing would happen because those who can afford to borrow money don’t want or need it, and those who do need it can’t qualify for it.
Agree. The money being printed is being used to negate toxic assets. Inflation is caused by excess money chasing too few goods, which isn’t the case with regards to the bailouts and stimulus. The money that’s being printed isn’t being circulated in the overall economy, which means no inflation.
2. Hyperinflationists, in general, only point to one side of the monetary argument when they discuss the “printing presses.” In almost all hyperinflationary arguments the discussion of the rate at which global wealth is being destroyed, relative to the amount of currency being printed is never fully reconciled…..This loss of wealth far outstrips the amount of money which has been printed in the US and points us further away from the idea of hyperinflation on a sheer creation replacement basis.
The fed has made it abundantly clear they will print an arbitrary amount of money to bailout the too big to fail, and make the stock market go up. By conjuring one trillion dollars the supposed financial crisis has been fixed. We can stop pretending there are problems with the economy. This recession was a deflationary one (wealth destruction), and fundamental macro economic theory dictates that in such circumstances quantitative easing is the appropriate fed policy to combating deflation.
The stress tests were a success and the bailouts are working as evidenced by the rallying stock market and falling LIBOR rates, as just a few examples.
You can inflate your way to prosperity to combat deflationary forces such as money hording and risk aversion, which explains why money market yields are at historic lows. It worked in 1982, 2003, and it’s working now. Bernanke is the enabler of prosperity though easy monetary policy. If inflation somehow becomes an issue the fed can gradually raise rates like in 2004-2007 or in the 90’s without hurting the overall economy.