John Polomny

Four Reasons Peter Schiff Is Wrong

"For one, stimulus packages are a proven way of getting the economy out of recession – because Hoover didn’t do it and Reagan did are significant reasons why we hold the divergent views we do of those presidents.'

Exactly how do stimulus packages produce long term wealth. Especially this one. It has very little actual "stimulus" and a whole lot of nonsense that amounts to transfer payments to idle non producers. I guess if you ram $1 trillion into the economy you can make GDP increase for a couple of quarters but this is not real wealth creation. Go back and read Henry Hazlitt "Economics in One Lesson" he debunked this during the Great Depression.

"The second reason is that the market has actually been pretty stable since the November lows. The technical signs are strong and showing that we’re in a base building phase that, at some point, will be the basis of a bull move."

The market completed a multi decade double top recently on the S&P. Earnings estimates are dropping on the S&P and could come in at $35 or lower for 2009. Put a generous 15x P/E ratio on it and you get around 400 on the S&P if that. put a historical PE of 8 for bear market bottoms and you can do the math, its a lot lower then here.

"The third reason is one of perspective: We’ve come out of severe recessions before. It’s easy to think the game has changed, but history says that’s very likely not the case, especially since people were predicting doom in each of those recessions, too.'

Yes except this is a depression and the government is doing everything it can to iterfere with the market clearing process which will just make the situation drag out for longer period of time.