Looking for hope that consumers will power their 70% of GDP back into healthy territory? Stop looking right here:
I'm tempted to be modest and say that I couldn't have phrased that last paragraph any better myself. I'm not that modest. "Any recession since the 1930s" is a happy way of avoiding the admission that we're living through Great Depression 2.0. The drop in GDP has created a positive feedback cycle, with job cuts depressing consumer spending, which hits corporate earnings, which will force more job cuts, etc.
Will America rise to the challenge and retool for the industries of the future? Will spending on nanotech and renewable energy take priority over an unnecessary (IMHO) overhaul of health care? Time will tell. I won't predict the results of any future stimulus.
I will stay short my uncovered calls on SPY and IWM.
Confidence among U.S. consumers unexpectedly fell in August as concern over jobs and wages grew.
Today’s figures, including an unchanged reading in the cost of living, underscore the damage that the biggest drop in gross domestic product in any recession since the 1930s has had on households and retailers. With little sign that $1 trillion of injections into the banking system is feeding through to inflation, Federal Reserve policy makers are forecast to sustain their efforts until a recovery is secured.
I'm tempted to be modest and say that I couldn't have phrased that last paragraph any better myself. I'm not that modest. "Any recession since the 1930s" is a happy way of avoiding the admission that we're living through Great Depression 2.0. The drop in GDP has created a positive feedback cycle, with job cuts depressing consumer spending, which hits corporate earnings, which will force more job cuts, etc.
Will America rise to the challenge and retool for the industries of the future? Will spending on nanotech and renewable energy take priority over an unnecessary (IMHO) overhaul of health care? Time will tell. I won't predict the results of any future stimulus.
I will stay short my uncovered calls on SPY and IWM.
