Friday, 27 March 2009 07:01

There are glimpses of recovery happening in some economic indicators, but for the most part, the "good news" is that things are only getting worse at a slower rate. In my book, this is bad news. This is the equivalent to being on an airplane that is nosediving into the ocean and beginning to cheer because the pilot has managed to pull the nose up to only slam into the mountain. Okay, so it"s not really like that, but there are a few indicators that are of importance.

The fact that the unemployment numbers are continuing to grow, is not good. The fact that layoffs are continuing to grow by major corporations like IBM and Google, is not good. The fact that disposable income and salaries payments went down is not good, but the ultimate sign that trumps all other bad news is that consumption continues to fall. Nobody is going to prosper unless the American consumers can consume, bottom line.

The stock market has rallies on bits and pieces of hopeful news, with no justified evidence of stabilization. This is a house of cards because the economic indicators will revealing a worsening situation and the media will run out of bullets to fire into the news to keep the market rally continuing.

Final thoughts: If you read my paper on the burst of the Japanese economy, you will see that our government is following an identical path to Japan. 15 years later, Japan"s stock market hit a new low in Oct "08. I would not hold my breath about seeing 10,000 on the Dow anytime soon or distant. Just a thought.

Visit my Blog...