This must be the “recovery” everyone is talking about
Posted by Ray on July 1, 2009 under cnbc, Main, Markets | 
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Is the economy out of the recession? Let’s see, new construction spending is down, again by .9%. Even government paid construction is down .6%, but that is very temporary. Manufacturing Supply Index contracted less than expected, but the index is still at 44.8, under 50 is considered a contraction, but it was up a little bit. Home sales were up.1%, basically flat, but I am sure that means rebound to many people even though prices are down 18% year-over-year.
This was fantastic news, Citi and JP Morgan are raising minimum payments on credit cards! They are increasing what you will have to pay from 2% up to 5% of your balance, we are sure this will cut down on delinquencies in the near future. They are doing that because in a few weeks they will have to give ample notice before screwing their customers. Keeping in mind delinquency rates of credit cards are already at 10% or so, up 68% year-over-year. This move by JP and Citi raises payments on some 160 million Americans. Did ti is on top of the $15.8 billion credit card companies pulled from consumers already?
All of this on top of higher food prices and higher energy prices, which is the real inflationary factor that the government considers too “volatile” to use as the real bench mark for inflation, instead they ex-out those figures and tell you everything is fine. I know everyone says that gas prices are down from last year, but come on we were at record highs last year for oil and $2.70 for a gallon of gas IS expensive. Yes, I know we need an alternative energy source, but until we have one we only have gasoline.
The dollar got killed today, down almost .0122 cents against the Euro and the dollar index is down by .54 to 79.88. Why is that important? Simple cheaper dollar translates into higher stock prices, in the short-term, as equity prices temporarily inflate with the weakening currency. The stronger the dollar the lower stocks go, the correlation is very strong right now, but will break eventually. Weaker dollars are better for our multi-international businesses, but not very good for America long-term and we see the dolalr getting much weaker in the future.
While we WANT to be positive about things, it is tough when we actually examine the facts about the economy. Our nation is in serious trouble and the policies our government are enacting means big trouble for us long-term. Sure stocks are going up, as stated above, but that is short-term or a bear market rally. These bear rallies can last years, but this one is running out of propaganda to sustain it.
Dennis, your “hope” that you are trying to “sell” is only going to cause damage. The mere fact that you are trying to sell hope is the problem because you know you are wrong. We ask again, will you admit it when you are wrong or are you going to lie and say that is not what I meant? I am sure you know what we think.
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