Economy Is Going to Get Much Worse: The so-called recovery is mostly smoke and mirrors

[marmar]

via AlterNet's PEEK:



Economy Is Going to Get Much Worse

Posted by Steven D., Booman Tribune at 2:02 PM on November 19, 2009.

The so-called recovery is mostly smoke and mirrors.




I think the economy is pretty darn awful, but with record profits on Wall Street and all the happy talk about a recovery from the recession (albeit a jobless recovery) it's confusing for many people as to what our economic future really holds. Well, here's relevant statistic that sums it up nicely, one that shows the so-called recovery is mostly a smoke and mirrors vaudeville magician's routine by the same people who either got us into this fine mess in the first place, or enabled the ones who did. Take a peek at this excerpt from Inner Workings David Goldman's blog at Asia Times:

This morning’s news that housing starts “unexpectedly” dropped by 11 percent month on month is consistent with my grim view of the American economy. The crystal-meth monetary policy at the Fed makes everyone feel better, until they don’t. The nonstop rise in the price of dollar hedges tells us that it can’t last forever. Large balance sheets attached to the Fed’s money pump can show profits, and the price of spread assets (as PIMCO’s Bill Gross keeps emphasizing) is stupid rich. But at the capillary level, through, the economy is dying and gangrene is setting in.

Here’s year on year growth in commercial and industrial loans from weekly reporting banks in the US: http://blog.atimes.net/?p=1236

A TWENTY PERCENT decline in commercial and industrial loans? That's not a recovery, it's a fricking catastrophic collapse in the fundamental underpinnings of our economy. It's Wall Street sucking Main Street and Government dry, grabbing all the cash while they can. Not surprisingly they are using that cash pump from the Federal Reserve to drive up commodities prices. What does that tell you? It tells me things are about to get much, much worse, and no one in Washington has a clue what to do. It's, and let's be honest, the worst economic performance since the Great Depression. Jobs that created the foundation of our economic growth in the 20th Century have flat disappeared, as Nouriel Roubini (you know, the economist whose predictions were right all along while the Friedman disciples like Alan Greenspan fiddled as the US economy burned to the ground) makes clear.

While America's official unemployment rate is already 10.2 per cent, the figure jumps to a whopping 17.5 per cent when discouraged workers and partially employed workers are included. And, while data from firms suggest that job losses in the past three months were about 600,000, household surveys, which include self-employed workers and small entrepreneurs, suggest a number above two million.

Moreover, the total effect on labour income – the product of jobs times hours worked times average hourly wages – has been more severe than that implied by the job losses alone, because many firms are cutting their workers' hours, placing them on furlough or lowering their wages as a way to share the pain.

Many of the lost jobs – in construction, finance, and outsourced manufacturing and services – are gone forever, and recent studies suggest that a quarter of U.S. jobs can be fully outsourced over time to other countries. Thus, a growing proportion of the work force – often below the radar screen of official statistics – is losing hope of finding gainful employment, while the unemployment rate (especially for poor, unskilled workers) will remain high for a much longer period of time than in previous recessions. (...)

The credit crunch for non-investment-grade firms and smaller firms, which rely mostly on access to bank loans rather than capital markets, is still severe. Or consider bankruptcies and defaults by households and firms. Larger firms – even those with large debt problems – can refinance their excessive liabilities in or out of court, but an unprecedented number of small businesses are going bankrupt. The same holds for households, with millions of weaker and poorer borrowers defaulting on mortgages, credit cards, auto loans, student loans and other consumer credit.

Consider also what is happening to private consumption and retail sales. Recent monthly figures suggest a rise in retail sales. But, because the official statistics capture mostly sales by larger retailers and exclude the fall by hundreds of thousands of smaller stores and businesses that have failed, consumption looks better than it really is. (...)

Moreover, income and wealth inequality is rising again. Poorer households are at greater risk of unemployment, falling wages or reductions in hours worked, all leading to lower labour income, whereas on Wall Street, outrageous bonuses have returned with a vengeance. With the stock market rising and home prices still falling, the wealthy are becoming richer, while the middle class and the poor – whose main wealth is a house rather than equities – are becoming poorer and being saddled with an unsustainable debt burden.

So, while the United States may technically be close to the end of a severe recession, most of America is facing a near-depression. Little wonder, then, that few Americans believe that what walks like a duck and quacks like a duck is actually the phoenix of recovery.

The Tea Baggers and their talk of a tax revolt and railing against the mythical socialist takeover of America by the Obama administration isn't the problem. ...........(more)

The complete piece is at: http://www.alternet.org/blogs/peek/144076/economy_is_going_to_get_much_worse/

[branders seine]

1. The supply-side bank bailout definitely made things worse,

unless you are a banker with a bonus.

[soarsboard2]

67. EXACTLY

you hit the nail on the head.

[Raschel]

2. Can America survive without production jobs?

[Lorien]

31. Without jobs of almost any kind. White collar workers are being hit just

as hard by outsourcing and downsizing. High tech, engineering, accountants, graphic artists, personal assistants, etc. have either gone or are going overseas. It's a completely unsustainable system.

[bikingaz]

35. Why do the looney tunes feel compelled to post bs on serious posts?

Economy is in the toilet, jobs are being lost daily, 2 wars, the US is in debt to the point of no-return and still spending like a drunken sailor and yet there are half-wits posting stuff about lunar bombings and other tripe.

[Warren DeMontague]

37. So, you ARE still mad about the moon being bombed.

What have you got against Looney Tunes, anyway?

[butterfly77]

77. I wonder..

did they give a damn 4 or 5 years ago,when many of the blue collar,minimum wage,college students,and older workers were telling them they were losing their jobs.

Oh,I guess now it has hit the REAL AMERICANS,so now it is of extreme importance.

[Seldona]

95. Lip service, perhaps.

There hasn't been a real safety net since Clinton. That they are just now coming around to that fact says an awful lot about them. Awful in more ways than one.

[HiFructosePronSyrup]

3. Now is a good time to buy gold.

And don't take the H1N1 vaccine, only an idiot would do that.

[Warren DeMontague]

20. It's always a good time to buy gold! And those mattresses where you can stuff cash & beef jerky.

Of course, once the Star Folks have their revenge on us for bombing their lunar colony, it won't matter much anyway.

[theophilus]

4. Hed fer the hills!

:wow:

[orwell]

5. Why would commodity prices rise...

...if economic activity is expected to collapse?

[yourout]

6. Speculation.....just like oil and gas.

[rgbecker]

7. That, and many other questions. Seems the doomers are still at it.

RE prices here are not indicating anything close to a collapse. Plenty on the market, but no one is dropping prices much to move the inventory.....just waiting, I guess. Meanwhile, building permits, which were in the dumps, have picked up for spring starts. Go pick your trend, up or down, it's up to you at this point.

[Jane Austin]

9. For the past three weeks, our orders

are up about 30% over last year.

Granted last year was abysmal and a 30% improvement won't get us even with two years ago, but it will keep our doors open and our employees employed.

I'm hopeful.

[JDPriestly]

76. What product do you sell, Jane Austin?

[Jane Austin]

92. We sell gifts, art, stationery and supplies

for dog (and cat) lovers.

We're at www.dogstuff.com and in real life we're right behind Teacher Heaven in north Austin.

Thanks for asking!

[JDPriestly]

93. Great! Now if we just had a dog . . . . .

Seriously, you have a very nice selection of gifts especially for dog-lovers.

[Jane Austin]

98. Thank you!

I'll bet you know someone who has a dog - or a cat - for whom you occasionally buy a gift. :)

Seriously, thanks for going to look.

[Statistical]

30. If dollar is worth less then anything priced in dollars rises.

Plus lots of world is ramping up production. The US isn't the sole buyer of iron, coal, oil, or wheat.

[AllentownJake]

32. Nor is the United States the only nation involved in Stimulus projects

In fact, pretty much every G20 nation in the world is involved in some form of stimulus spending right now.

[Statistical]

39. Exactly. CAT reports orders to China for heavy industrial equipment rose 30% year over year.

Sadly most countries had real stimulus and we had lot of slow burn spending with a fancy stimulus name.

Those economies with real stimulus pkg will jump start faster and harder than ours will. IMHO the US will lag the global recovery.

[AllentownJake]

41. I've been thinking that for a while

When I heard about the Chinese High Speed rail project, I thought, oh shit we are fucked. We are filling pot-holes when we should be building infrastructure for life with higher energy prices and instead we are trying to repair the 20th century infrastructure (which is important at a local level just doesn't seem like a national plan for growth).

That coupled with the tax breaks and the push demand forward programs.

Our congress really fucked that bill up. The original bill before it went to the House and Senate was a much better idea.

[Statistical]

45. Generally I think our govt overspends ($11T anyone) BUT

I actually was for strong stimulus if they money was stimulative. I really thought we would see substantial projects to get stuff built and people employed.

The stimulus isn't all bad but it is too shotgun, too spread out to have a meaningful effect.

The US economy is $14 trillion dollars. The govt can't prop it up. It is too big, too massive. Trying to replace private dollars with public ones dollar for dollar would costs trillions. However properly done (like in China, Japan, Australia) the govt can provide a spark to get the engine running on its own.

[AllentownJake]

47. I'll have to look for it but I read an economic report

that showed the employment that results from different sectors of Government spending. Public Transportation infrastructure was the largest, military spending the lowest.

Ending the wars will do a lot to get those deficits under control. It takes money out of the US economy.

[dotymed]

59. That is one of our main problems.

The bought and paid for congress (we have to publicly finance
elections or it will never change) either believe or are paid
to pretend that a return to our pre-recession (depression)
economy is the goal. We have to change and to do that our
financial model has to be scrapped. Every American KNEW yet
did nothing, when Clinton announced that we were to become a
service industry country. That, in itself, speaks of slaves
and masters. We have the technology (Other countries are using
it) to break our dependence on fossil fuels and by investing
in projects like high speed rail, overturning the business
model of the current robber barons we can begin to help our
economy. Unless the workers are treated as partners in these
ventures, then it won't work. Look at the European worker. 5
weeks paid vacation, universal health care, paid maternity and
disability leave with their jobs still open for them. They are
guaranteed partners in their society and therefore invested in
its future. They are not afraid and bullied into being
participants by CEO's who "earn" 4000 times what
they earn. they are partners with the CEO's who earn maybe 40
times what they do. The whole structure is what has has to
sustainable, from the foundation. The American structure is
weak and built on fear of no health care, no money to sustain
them if they are injured or ill, no parity if everything
functions as it should. We have to change our model. Starting
with our political financing and ending in regulating the
puppet masters at the very least.
p.s. if my fonts look stupid, I would appreciate advice on how
to fix it, but not from smart asses. thanks

[JDPriestly]

78. The streets around my house have been torn up for weeks now.

They are replacing water pipes. Just why, I have no idea. We have never had a problem with our water pressure. Surely there are more important things for these guys to be doing. I would love to have solar panels on my house in Southern California. But they are too expensive. We would have to redo our entire electrical and heating systems. Even though our house is small, it would be too costly. Why can't our country prioritize?

[phasma ex machina]

101. +1 All high traffic streets torn up in my town to enable everybody to see stimulus in action.

Same old chuck holes remain elsewhere.

[sendero]

53. Because...

... Wall Street has to have some playground to play with YOUR money in.

Also, as the gov't prints more and more dollars, the dollar becomes worth less and less and so a given commodity is worth more dollars.

[Vincardog]

68. It is called market manipulation. There are rules against it. That is why they have to trade oil on

the "Dark Markets" off shore to avoid the FEDs. They borrow money from the FED at 0%.
Then they buy derivatives betting the market will go up.
Then they do "simultaneous trades"
(where two partners sell each other the same massive amount of an item but no money changes hands)
Then they cash in on the derivatives.

They gamble with our money. Heads they win tails we lose

[JDPriestly]

74. Hedges against the loss in the dollar.

Here is the problem: Our government gave truckloads of dollars to Wall Street bankers who had made their careers by speculating on commodities and the housing and internet bubbles. The money our government gave these people was given pretty much without any strings attached -- without conditions. So, the Wall Street firms made very few personnel changes, meaning that the same people who caused the bubbles and the crashes are still working in the same Wall Street firms. All they know how to do is to speculate on whatever is the latest excuse for a bubble. Internet schemes crashed. Housing crashed. So, with the money the government gave them in their greedy hands, these professional Wall Street speculators are looking for the next commodity or market that is going to catch on, bubble up and make them multi-billionaires (they hope).

The Wall Street folks live in New York City. NYC used to be a village, became a city teeming with immigrants and sweatshops and now houses a lot of people who work in service industries -- and a lot of Wall Street speculators. Manufacturing work is not what you think of when you think of Wall Street and New York. The people who control most of our money have no idea what real hands-on work is. I question whether these are people who have ever actually made anything, say a table or a garment. At most they assemble furniture kits or more likely their kids' toys at Christmas.

So, the Wall Street folks are ignorant when it comes to doing real things, making real things, creating real things. All they know is creating financial bubbles. Had the banks been allowed to fail and the homeowners bailed out, we might be able to get real people to handle the nation's money. They would know how to invest in industry, how to assess the quality of an employee's work, the engineering that goes into a new product, how to build our country to be truly prosperous. Instead, we have a bunch of overpaid accountants and speculators handling our money and enjoying the power -- and their mansions and penthouses.

Remember, Andrew Carnegie, Henry Ford and J.D. Rockefeller didn't just understand finance. They also understood how to organize factories and make things. Nowadays, even the CEOs of our biggest companies all too often have never actually held a soldering iron or a hammer in their hand -- other than for hobby purposes. We need to find a way to get the money into the hands of people with ideas who want to make good products. The unconditional bail-out of the big banks was a bust, a huge mistake.

Are there any good blacksmiths in New York City?

[TheFarseer]

86. first of all, many people are not expecting a collapse

Second of all, people who expect inflation - how could anyone not - are going to commodities. Thirdly, money has to go somewhere. You can't get anything for it at the bank. I think that's the biggest reason for the stock market going up - money has to go somewhere and people can't live on 1% from a bank CD.

[FormerDittoHead]

8. Our ECONOMY has been smoke and mirrors for decades now...

Anyone with half a brain knows that we simply can't forever import more than we export.

For years, the economy has been a matter of siphoning wealth/money from one class to the top, then exporting it (tax deferred) to build up other countries.

I'm convinced that banks saw what was coming, and decided to cash in before we'd tell them we COULDN'T. What they did (were allowed to do) only made things happen quicker and for the worse.

"Business as usual" is not going to get us out of this mess.

[avaistheone1]

49. The day of reckoning has definitely come.

[Greyhound]

72. Since raygun, they have been stealing the equity built over the preceding 50 years.

That's the fundamental problem that nobody will talk about. We had this wonderful mansion completely paid off in a great location and the value went up and up. Then the parasites convinced the sheeple that they could mortgage it and buy some cool toys, of course they left out the part that gave these parasites the lion's share of the proceeds.

Since then our economic policies have been like the Californians that have been living off of increasing property values for the last 20 years. Just keep re-financing to generate enough to stay afloat another quarter.

[CANDO]

10. Where are these corporate titans who "believe" in America?

If you motherfuckers really do believe in America, then by god show me! Bring our production jobs back here. The price of the goods you make in China has not gone down when you sell it here, so we're on to your scheme to maximize profits at our expense. When you make autos in Mexico, you don't lower your asking price accordingly, so what gives? And when will we get our politicians to realize we need to go back to sane trade policies with trade tariffs to protect domestic industry. It's what we did as a nation for over 200 years before Reagan changed it all.

[kerrywins]

66. Big Corporations Believe in Big Government

Because without Big Government to give handouts and get rid of the competition, big corporations could not exist...

[GoddessOfGuinness]

80. They're all hanging out at the pool in Dubai

They don't give a flying shit about this country...21st century robber-barons.

[RB TexLa]

11. Maybe we should give some more welfare to the car dealerships

[kenny blankenship]

12. You're so wrong! the economy is going to get better and better

But more and more people will be out of work, and more and more people will be struggling to keep their heads above water. More and more will lose the fight and see their future slip away. But the ECONOMY will be doing great. Just watch the news- you'll see!

[timeforpeace]

13. What about all those jobs the stimulus created in Congressional districts that don't exist?

[Name removed]

71. Deleted message

Message removed by moderator. Click here to review the message board rules.

[tjwash]

75. It was a typo. District 15 was AZ's 15th legislative district, not the 15th congressional district

But please, don't let that stop the smarminess.

[doc03]

14. Yet another the sky is falling post. Are you wishing

this all comes true or what, just what is your point.

[TwixVoy]

15. How many fools on DU say this line?

I see it all the time. It reminds me of the stupid ass republicans during the bush years with the "if you don't like it leave the USA" or "freedom fry" BS.

Just because someone is being fucking realistic about the situation doesn't mean they "wish it to happen".

People like you are likely living a very stable life, but are deathly afraid of that being disrupted. So you go in to head-in-the-sand mode.

Take a look around you. Get the fu** out of your gated community one day and take a look around. I have lived in this city over 20 years, and I see more homeless people every day than I EVER have at any point prior. I also see homeless KIDS and complete families of the street now - something I have NEVER seen before.

I'm glad your wall street numbers are all sunshine up the ass for you, but when I look at other people in my community I know there is no recovery.

Hell I am doing OK my self. My life is pretty stable. That doesn't mean I am going to ignore what is going on with everyone else.

A LOT of people who like to ignore everyone else and live their little american dream life are going to be in for a rude awakening when they realize it isn't going to be possible anymore.

[doc03]

16. Know it all I have been unemployed for 7 months

and it is not the first time. We have business cycles always have and always will. The economy officially came out of recession just a couple months ago it takes time for jobs to come back. Employers are reluctant to hire after a recession until they are sure the recovery is real. Go over to freeperville they will love your sky is falling posts over there.

[sendero]

52. Just because a freeper..

... loves it doesn't mean it isn't true. This mess is 90% Republican in nature, but Obama has had the misfortune to inherit it. People have short memories so it will soon be a Democratic problem.

Nonetheless, things really ARE that bad. Wall Street is a disconnected-from-reality casino where the players are now getting rich trading our tax money back and forth.

There is NOTHING on the horizon that indicates that the job situation is about to improve. ALL of the numbers coming out of Washington are cooked to look better than they are. And probably that's ok, because keeping people from understanding how bad things are gives those of us who get it more time to prepare.

This is NOT your typical "business cycle" recession. It will NOT be over in 12-18 months. And I'd love to see it go away tomorrow, but I'm pretty sure it is not going away for YEARS.

[blindpig]

79. Business cycles are endemic to capitalism

One way to do away with them....

[doc03]

17. Man how times have changed, if anyone even hinted a

disagreement with Obama at this time last year you were branded a racist especially any Hillary supporter.

[marmar]

19. Que?

Sincerely, :wtf:

[marmar]

18. I posted an article.....What is who's point? WTF are you talking about?

nt

[AllentownJake]

22. The rainbow and unicorn crowd get pissed when they read something that migh

disagree with their world view that Obama saved them.

[gristy]

25. Yes, you posted the article

Now are you going to defend it or not?

[marmar]

26. I posted an article for people to read....I DIDN'T WRITE IT !!!

Or is that too obtuse a concept? ....

What you think of the article is what you think of the article ..... I don't really care one way or the other.

[AdHocSolver]

24. The sky has already fallen for millions of Americans. Come back from your alternate reality. n/t

[stevietheman]

84. A lot of us agree with your position -- you're nowhere close to alone on this. n/t

n/t

[Warren DeMontague]

21. Translation: "I panicked, and bailed out of the market in early March"

"fuck fuck fuckity FUCK~!!!!"

[AllentownJake]

23. Yes because you would have been restored to your market value in 1999

or maybe you wouldn't if you take inflation into account. Oh and if you take into account the value of the Dollar in April 2009 vs. November 2009, your gains are further eroded. But hey it broke 10,000!

What is that you are saying? The S&P is trading 130-1 PE...better hope earnings for the 4th quarter reduce that ratio.

But hey the numbers on the big board went up.

[rgbecker]

27. S&P PE 130-1?????Link please.

[Statistical]

29. He pulls that stat out at least once a week.

Looks at intraday peak from 2 months ago just after big rally and just before Q3-2008 bad earnings rolled off the trailing twelve months.

[Statistical]

28. The S&P is not trading at 130:1.

http://www.bullandbearwise.com/SPEarnings.asp

Q4-2008 earnings were very bad which brings down trailing twelve months. However in 2 months that will roll off and be replaced w/ Q4-2009.

Another way to look at it is forward P/E which estimated earnings for next fiscal year. Forward P/E is 32.7.

Even better way to look is dividend yield (dividend = real money much harder to "fake")

For first time in 50 years the dividend yield on S&P 500 exceeds that of 10 year T-bond.
http://www.bloomberg.com/apps/data?pid=avimage&iid=iLCUr0rxBXlI

[AllentownJake]

34. I respect your posts so explain to me why I see 2 numbers

Some sites will say the ratio is around 20, and some will say around 130.

What was yield on 10 year Treasuries and does the FED's 0 interest policy effect that rate?

[Statistical]

38. There are two numbers because you have forward & trailing P/E

trailing takes earnings for last 4 qtrs. Most companies have reported Q3-2009 the trailing earnings would be the sum of Q4-2008, Q1-2009, Q2-2009, Q3-2009. Current price divided by Sum of those 4 qtrs = trailing P/E

For forward P/E we look at estimated earnings for next 4 qtrs.
Both are useful in different ways.

Yield on 10yr bond right now is 3.38%. The Feds 0% fed funds rate affects short end of yield curve. Long end of yield curve is more contingent on long term growth and inflation. Since t-bonds generally have low yield <=5% inflation can substantially reduce returns. As inflation risk rises investors will demand a higher yield to compensate and yield on 10 year will rise.

A dividend yield of 3%+ is strong sign S&P is not overvalued. Look at last 20 year on the chart. On a prtice to dividend ratio the S&P is actually cheaper than it has ever been in 90s and 00s. Still I think S&P will likely correct in short term. We seem to have substantial difficulty staying north of 1100 and it will likely take strong Q4 earnings or some substantial news for us to power past that.

Full disclosure. I am currently bearish on S&P in short term (prior to mid December) but bullish on SPX long term.

[AllentownJake]

43. Thank you

My biggest concern is the regulatory environment. I was an auditor and I've seen and read my fair share of fraud stories over the years. The dividend yield is more helpful.

[Statistical]

46. I am a big fan of high dividend stocks.

I got some pure growth plays too (AMD, Google, Vale, China Mobile, Sirius/XM) however nothing beats hard cash.

A company paying a dividend has to get the money from somewhere. Much harder to fake the books when paying out hard cash each qtr.

I picked up some VZ when the dividend was >8%. Come on 8% dividend if just free money on top of a quality company like VZ.

Some people see dividends as boring or they don't like them because of taxes but I keep high dividend stocks in my Roth so there are no taxes to pay and I like the security of real earnings.

[AllentownJake]

48. I like dividends because it proves liquidity

I'm not a fan of growth stocks. Than again, I prefer companies that have slow and steady growth than explosive growth. Explosive growth is ok, when a company starts, but eventually you have to function in reality and accept that there is a limit to the market for your service or products. Not a fan of aquisitions either. Very few end up the way they were intended to.

[BR_Parkway]

50. I don't play in the stock market, so this question may be very simple

and possibly foolish to those of you who do - but when you make this statement:

For first time in 50 years the dividend yield on S&P 500 exceeds that of 10 year T-bond.

Why are you saying that as proof that it's a good thing, shouldn't that point out that things are over pumped and about to correct itself? It just seems like you're talking about a lot of speculative 'growth' in earnings when everyday there are reports of record numbers of 'consumers' falling into non-consumer status (jobless, foreclosure, cutback salaries/hours)

My son gets into the stock market and swears on it like the Holy Grail - he's tried to explain it all to me many times over, but it still sounds like my grandmother buying her $10 worth of lottery tickets every week, then claiming she'd "won" when she got $5 or $20 back every once in a while.

[Statistical]

61. The exact opposite.

Dividend yield is the dividend divided by the stock. It isn't interest but it is comparable to interest on a bond.

So take hypothetical stock xyz corp. $10 per share and pays an annual dividend of $0.10. That is a yield of 1%.

If you bought $1000 dollars (100 shares) you would get a payment of $10 ($0.10 * 100 shares).

Traditionally the dividend yield on entire S&P500 has been around 3%-5%. Companies made actual profits (not job cutting, cost cutting, paper profits) but real profits. Sell a good, collect a profit, give the shareholders some.

Then in 1990s tha started to change. Dividend yields plummeted to <1%. This means people weren't buying stocks for a return in cash on their money but pure growth potential. Nothing wrong with growth but massive growth (investors looking for 20%, 30%, 50% a year) is unsustainable.

Recently the dividend yield has risen to >3% at the same time the t-bond has fallen. The ability to get both a 3%+ yield (VZ for example has 6% yield) on your money and the ability to enjoy growing dividends if the company improves in the future is a win-win.

One line answer: a rise in dividend yield indicates companies are looking to return value to shareholders rather than keep it on speculative deals, and "funny math".

[sendero]

54. It's pretty easy to meet that metric..

... when the Fed has a zero-interest-rate-policy. The Fed cannot do that forever so there will be an accountability moment.

[Statistical]

63. 10 year bond is not controlled by short term interest rates.

Like you said fed will raise rates eventually. 10 year bond doesn't go down because fed drops OVERNIGHT interest rates to 0% because buying a 10 year bond you are locking that money in for a decade.

The largest influence on 10 year yields is inflation risk and risk apetite. Inflation risk is low and investors are "scared" meaning a lot of demand for "safe" money. This combination has pushed rates on 10yr down.

Fed is actually working to steepen the yield curve (low short term interest rates, high longer term interest rates) to give banks an incentive to lend even in a deflationary enviroment.

[sendero]

91. Granted..

... but a ZIRP creates all kinds of distortions, carry trade and others that screw everything up. So while 10 year rates are not DIRECTLY controlled by short term rates, to say there is no influence is crazy.

[Warren DeMontague]

36. I'm saying that if I had a dollar for every half-baked doomsday thread I've read on DU

I would have turned a tidy profit by now.

[AllentownJake]

40. On the other side

If I had a dollar for every rosy prediction thread. I'd have about the same amount of money. Somewhere in the middle is probably the truth.

[Warren DeMontague]

42. I'm not making any rosy predictions

only saying that I don't believe we're nearly as doomed as a large section of DU has spent the past 5 & 1/2 years, in my experience, exhorting us to believe that we are.

[AllentownJake]

44. They sometimes get it right

The UN just said Afghanistan is now the worst place in the world.

[DU GrovelBot]

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[Turbineguy]

51. Is there anything

I can do to help Obama fail?

[marmar]

55. Yeah, an article from the Booman Tribune will bring down the president.

:wtf:

Daft. Comically daft.

[Bluenorthwest]

56. This is not about Obama

It is about the hundreds of millions of citizens he works for.

[Selatius]

88. Your stupidity is painful to watch. nt

[timzi]

57. Thanks For The Post. Highly Recommend.

I got 100% out of the market in early September due to perceived poor risk/reward. Yes there has
been a cost but can't shake my feeling that something bad will trigger a dramatic downturn. Still
have that.

[Jeff In Milwaukee]

58. Blah, blah, blah

Will the economy get worse? Yes. Will it get better? Yes. Can it do both at the same time? Yes.

Here's one thing I've learned from nearly thirty years of investing. Anybody who claims to be able to predict future actions of the market is absolutely and utterly full of horsecrap.

And I say that with all due respect to the Booman Tribune...

[blindpig]

81. Oh so blaise, Mr Investor

So good that you can take a lofty perspective. Meanwhile millions are badly sucking wind.....

[Vidar]

60. K&R

[Rockholm]

62. Another "attack the ecomomy" thread.

[jpak]

64. More whining Obama-Must-Fail horseshit

:puke:

[soarsboard2]

65. TARP Money lent to India and China

stimulus money going to China.

What the hell do you expect???

Bush's policies got us into this mess and Obama's aren't getting us out.

[Greyhound]

73. That's what really irks the pom-pom squad, that our saviour isn't saving anybody

except the billionaires that hired him, and it is getting harder and harder to hide that.

"I suppose you would have preferred McSame and Moosilini" should be here any minute...

[bl968]

69. A gigantic pump and dump

I have a sinking suspicion that the bailouts and the American Recovery and Reinvestment act were nothing but a gigantic pump and dump by the Federal Reserve, to get the market up enough so that the wealthy can dump their investments, then after the ultimate crash, that they can come in and rebuild the markets.

[treestar]

70. Why should be value this blogger's opinion

over the doomer and gloomers on DU already?

Whose agenda is it to crush our optimism?

[AllentownJake]

90. The agenda is for you to join us and tell our President to do

something fucking productive and stop listening to those two idiots you hired from the Clinton Admin.

[winyanstaz]

82. K & R.....

Thanks for your post. I was trying to tell people this for a long time now...its going to get a hell of a lot worse before it gets better and we need to start hunkering down and working together NOW.

[JenGatherer]

83. The stock market is not that important

If you really want to scare yourself silly about the economy, go investigate Peak Oil. That's the scariest thing I've ever read in my entire life.

[stevietheman]

85. Recessions don't last forever; things will get better again.

They always do.

[Skittles]

102. correction

they always HAVE; doesn't mean they always WILL

[hulka38]

87. But the Dow got up over 10K. That means the economy is doing really well again. :P

[humbled_opinion]

89. Sounds like one giant Ponzi Scheme

Which is going to implode and bankrupt the nation. Now what are we going to do about it?

(a) World War

(b) Collapse and break up of the USA

(c) End Wars and create and alternate energy source

(d) Get High

(e) both a and b

(f) both c and d

[amborin]

94. MANY predicted an "L" shaped "recovery" in any case, lower housing starts = less habitat destruction

and less global climate change

i can't believe people hope to recharge the economy with more rampant materialism and the housing industry

what happened to the agenda of a GREEN ecomomy?

[DemocratSinceBirth]

99. How Does Making A Lot Of Folks Homeless Help The Economy Or Them

I guess if we all died the environment would be great.

[amborin]

100. huh? your reply makes no sense, it's a false dichotomy;

what is your problem?

[JCMach1]

96. The real smoke and mirrors is China... when the banks collapse there....

*shudder*

25-40% bad debt on their books= Big problem which will hit the fan in coming years.

[B Calm]

97. In our history, whenever the stock market makes a rebound it's the

first sign of a recovery. But that was the past. . . But now days we don't make anything here anymore. All our manufacturing jobs has went overseas to exploit even cheaper labor. Here is another thing they aren't telling you! All those dollars we have invested in our 401K stock market portfolios are being milked and harvested to funnel investment funds internationally. The good times have come to an end, and no one dares tell you this, because it might cause a panic.

[Thickasabrick]

103. Roubini says if you are unemployed, hunker down. You will be that

way for awhile. I plan to try to and do something useful with that time....that doesn't cost anything.