Recovery and Economic Optimism: What a Difference a Year Makes

[Joseph Burkeson, CMI]

Good news on the horizion... Check out the graphs.


Recovery and Economic Optimism: What a Difference a Year Makes

More and more it becomes clear that the big collapse in 2008 was an aberration that resulted primarily from a severe shock to confidence and a huge and sudden increase in the world's demand for safety and liquidity, all triggered by fears of a collapse of the global financial system. Central banks were slow to respond to the unprecedented increase in the world's demand for money, and this resulted in a widespread selloff of all risk assets and massive deleveraging. Central banks eventually figured things out, and the return of liquidity has allowed prices of risk assets to recoup most of their losses. The collapse in monetary velocity which precipitated the recession has begun to reverse, and most economies around the world are again growing. The recovery is still in its early stages, however, and so there appears to be lots more room to the upside.

There have actually been two dramas playing out over the past year or so. One was the mechanical one that resulted from the shock to confidence and the huge increase in the demand for liquidity and safety. The other was the shock to long-term expectations that resulted from Obama's radical pursuit of a hard-left agenda that left investors struggling to comprehend the ramifications of a massive increase in government control over the economy and one new spending program after another. The expected burden of taxes began to soar; the anticipated efficiency and potential growth rate of the economy began to plunge; and the future solvency of the US government began to dissolve. The worst part of both dramas combined in a Perfect Storm to produce the equity market collapse of early March 2009.

Since then the economy has managed to heal many of its wounds, and the political scene has changed dramatically. We are now eight months into a recovery, and Obama's two signature initiatives, cap and trade and healthcare reform, are in a shambles. The Democratic Party appears to be completely out of touch with the mood of the electorate, which was never prepared for a hard turn to the left. The balance of power in Washington has shifted dramatically, and investor and consumer confidence is returning. (Whatever is bad for Washington is often good for individual liberty and free markets.)

Excerpt: http://seekingalpha.com/article/1896...e-a-year-makes

[measter]

spoken like a guy with job.

The only thing he is right about is that the electorate is/was not ready for a hard left turn.

The economy here gets worse every month.

[Kevin M. Leonard]

Originally Posted by measter

spoken like a guy with job.

The only thing he is right about is that the electorate is/was not ready for a hard left turn.

The economy here gets worse every month.

Mark, you should fill out your profile so we know where your from.
Click "control panel" above to fill in or edit your information.

[John McKenna]

Gold prices go up when confidence is low...

[Kevin M. Leonard]

Originally Posted by jmckenna1

Gold prices go up when confidence is low...

If that's true it looks like under Clinton Confindence was was high but not so during the Bush years. Thanks for proving that point.

[Michael Larson]

Lotsa luck figuring out the gold market with such siplistic thinking.

[rmaday]

Originally Posted by jmckenna1

Gold prices go up when confidence is low...

Originally Posted by mlarson

Lotsa luck figuring out the gold market with such siplistic thinking.

Consider the source.

[Kevin M. Leonard]

Originally Posted by rmaday

Consider the source.

I agree Rick.-----------But there's a chart. So it's gotta be so.

[Michael Larson]

Originally Posted by kleonard

I agree Rick.-----------But there's a chart. So it's gotta be so.

Charts are what they are.

Correlation is not necessarily causation.

[Joseph Burkeson, CMI]

Originally Posted by mlarson

Charts are what they are.

Correlation is not necessarily causation.

Unless of course the graph somehow denigrates President Obama, under those conditions you present it as if it were gospel.

[Michael Larson]

Originally Posted by jburkeson1

Unless of course the graph somehow denigrates President Obama, under those conditions you present it as if it were gospel.

Clever but not accurate or relevant.

[Brian E. Kelly]

Originally Posted by mlarson

Clever but not accurate or relevant.

This should be your tag line, Michael.

[Michael Larson]

Originally Posted by bkelly2

This should be your tag line, Michael.

It's good to hear from the cheap seats occasionally. thanks

Now moving along...

Do you have anything to add to the discussion or just one of you drive by snipes?

[Joseph Burkeson, CMI]

Originally Posted by mlarson

Clever but not accurate or relevant.

Written under your name in your High School Yearbook no doubt... Fitting.

[Steven C. Waskewicz]

Originally Posted by jburkeson1

.
The expected burden of taxes began to soar; the anticipated efficiency and potential growth rate of the economy began to plunge; and the future solvency of the US government began to dissolve. The worst part of both dramas combined in a Perfect Storm to produce the equity market collapse of early March 2009.
We are now eight months into a recovery, and Obama's two signature initiatives, cap and trade and healthcare reform, are in a shambles. The Democratic Party appears to be completely out of touch with the mood of the electorate

Excerpt: http://seekingalpha.com/article/1896...e-a-year-makes

Its 2010 bud, and they certainly have that description correct.