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Economic Indicators Suggest Investing Caution

There is investor class, and then there is everyone else. Everyone else is either watching themselves go and drop further underwater on their existing mortgages, reducing their indebtedness by paying off credit card debt or other debt, therefore not spending as much or not at all except for essentials, and then, there are those folks we all watched on TV out on Black Friday racking up more debt on their cards. Job losses may not have been as strong as in the past, but over the last 3 months, the average is around 87,000. If and when we see corporate defaults and bankruptcies, look for 1.5M in job layoffs.
And then, there is the investor class who makes money by watching their computer screens 8 hours per day. The rest of us don't have that luxury.

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Canadian Dollar Rattled by Shanghai Meltdown, Interventionist Talk

Mr. Dorsch, great article! Very thorough with your views on what is going on with the Canadian markets. One commentor stated correctly that the Canadians can work to create a functioning country since they are NOT so stupid as to start wars and waste precious resources maintaining them; and, they control health care costs by nationalizing their system, as well as control leveraging and "creative securitization"; and finally, hold on to their manufacturing base.

What is wrong with the US government is that that don't want to take a lesson from the Canadians. Canada is like the youngest sibling in a family of three. They tend to watch what the other two did wrong, and how they related to their parents, ie. other nations, and then, do it better, and with more sense.

Mr. Dorsch, are you REALLY George Clooney in disguise? :)

eye-on-washington.blog...

Is a Jobless Recovery Really Your Best Friend?

The government intervention is not enough to pull the country out of a massive collapse. The economy cannot be sustained with growing numbers of un-underemployed. The college graduates today are underemployed with massive personal debt.

We have a personal debt bubble growing and will break. The economy is unsustainable. Exports-ie. ISM data is due to a low dollar value making products affordable overseas, yet domestic earnings are weak forcing workers to save, pay down debt, and limit purchases.

Corporate earnings will continue to shrink. And, the Chinese bubble will eventually explode increasing the number of their unemployed and destroying the ever expanding home price values in China (1-3% per week!).

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Why This Is No Time for Buy and Hold

Fritz, it sounds like both camps are reading and commenting on your piece. I, from the camp of agreement, also believe the logic from which you write your piece. For anyone to believe that the US engages in a capitalistic system must have been injecting the Kool-aid! What capitalism? What exists is is a system to benefit the largest of the large corporations with their government rules allowing outsourcing, bailouts when hard-up for cash, and with the private Federal Reserve holding their hands. This is NOT a free market, but a Nanny State for the large and financial corporations.

China will eventually have to stop buying Treasurys when their stimulus bubble breaks and millions are unemployed and their own housing bubble explodes. The world is in a contraction and the bottom has not yet occurred. The global GDP has been carried by China. The American consumer will continue to contract their spending. The DOW will drop below 8000, and likely below 7000. There are no binders to hold the recipe together. It is an illusion.

Does Bernanke Blow Bubbles Too?

Green energy will not likely be a bubble, since it would eventually reduce the purchases of foreign oil and NG. It would raise our GDP and lower or trade deficit, as well as be a product we could export.

It would be an industry and not a gamble. Gambles and speculation are how bubbles rise to the surface and into the atmosphere.

Yes, Bernanke blows bubbles. Just have him sit in his kiddie pool and you can see them surround him.

A Moderate Recovery by Year-End

A mixed blessing for the nation. People with money to invest in a downsized corporate equities market, might do well, according to Dr. Morici, while the actual real economy will drag along with 10% unemployment, or more, stagnant wages, stagnant spending and more.

Consumer Confidence Perception vs. Economic Reality

James, I have been saying the same thing for over a year!!! It has been the world's biggest Ponzi scheme beginning 30 years ago and ending up being blown bigger during the 8 years of Bush. Now Obama appears to extended it whereby the damage will be very significant.

Jim Welsh on the Economy: Past the Point of No Return

Well written and thorough analysis. Thanks!

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Roubini and Other Doomsayers Will Be Proven Wrong

Professor, I hope you are correct, but my gut says you are not. The Obama administration is using trickle down economics, it seems, to bring about a recovery. It failed before, and therefore, it will fail again. You cannot bring a recovery with monetary policy. Show me a time when it worked?

The only recovery is one from the bottom-up. If the dollars had been spent in rebuilding manufacturing, as the Chinese central bank is doing domestically, then we would have a recovery.

Trickle down does not work.
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Why the Fed Is Right to Be Worried

I believe what is being said in the article has a lot of credence. It does seem that we are in a parallel universe with the 1990s of Japan. What is different is that Japan has a population 3 times smaller than the US. Our consumer base is three times larger, even for daily essentials, therefore that could be an environment of rising prices=inflation.

I do see deflation being here for a while longer. Now, as was said, if the stock market falls below our 1996-7 level, then deflation will be here for a long time.

I don't see unemployment improving even with the stimulus. There are so many college graduates that they will replace the un-underemployed as other workers are hired.

Good article!

Time to Bury the Markets?

There are large numbers of "Back to the Stone Age" followers writing on blogs about their newly acquired guns and tins, stashing their supplies into basements and treehouses ready to kill their neighbors who might come over for a cup of flour and sugar. Those buyers have likely jacked up those stock prices. But, I am not discounting a pending doom. The bankers surely should be investigated and indicted, and called up before a Grand Jury, but all is quiet in these areas.

Best to get out of the market and stash money at home and hold cash in an account or two or three, of course, in local solvent banks.

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All Eyes on Washington

We at eye-on-washington.blog... appreciate as many eyes on Washington as possible.