Re: The recessions coming to an end! Get your heads out …
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Yes the "recession" is over because leading economic indicators are pointing towards a recovery. Which economic indicators have risen? Consumer confidence: up, stock market: up, business management confidence: up, unemployment: down but a lagging indicator.
Here are a few reasons why the recession will not end for a very long time.
1. Gov issuance of Treasury notes out of control with export orientated countries picking up the tab. How much longer with this happen for?
2. Future unfunded liabilties become present liabilities very soon
3. Major credit losses in Alt A loans, ARM’s, Prime, and Commercial Real Estate
4. Continuing job losses in a consumer based service economy is a leading economic indicator. Past jobless recoveries only took place because of increase of credit. The nation is 53 trillion dollars in the hole. Who is going to lever up now, and who can anyways, other then the gov and a few financial institutions?
5. Hostile business environment with excessive regulation, taxation, litigation in the US whereas many other places offer friendly business environments.
Conclusion: no recovery for a loooonngg time. The pain is just beginning. If you believe false gov data then go ahead and believe it so you can feel better. All i see is corporate revenues down 20-30-40% YOY, home sales down 40% YOY, state revenues down at least 20% YOY, auto sales down 40% YOY, but 2nd qtr GDP is projected to be down -1.5% YOY. How this is possible is beyond my imagination.
Enjoy the recovery lol. Oh and Australia is going to get wacked so hard on its head it will be scary. Once China’s credit boom blows up as all credit booms blow up it will wreak havoc on Australian commodity exports. Also, the housing bubble in AUS has been propped up by foolish and reckless gov policy. I give China 18-24 months until its bubble bursts. Chinese exports have collapsed so the gov is handing out loans like candy. Bubbles forming in chinese stocks, real estate, and construction. Roads, bridges, tunnels being built like crazy. Eventually, the stimulus money will run out and when it does China will either have to issue stimulus 2 by selling some of its foreign currency reserves to finance it or it will print the difference crashing the Yuan and reaping havoc on chinese citizens and foreign investors. A third option is that the Chinese Politburo does nothing and allows the trade imbalance it has with the US to cure itself naturally. I doubt this will happen as central economic planning is the new fad around the world. Either way its a game of chicken with the central banks of the world.