On The Economy: Don’t Believe the Hype

Lately, you can’t throw a stone without hitting some finance or business grandee, led by head cheerleader Treasury Secretary Hank Paulson, discussing their optimism about the economy, the worst being over, etc., etc. This is understandable from their perspective, but I say, don’t believe the hype. From my perspective, we are still in the eye of the storm. The recent upward move in the stock market notwithstanding, there are so many fundamental weaknesses in the American economy right now that it’s frightening.

Housing crisis, inflation, credit crunch, consumer debt – you name it. At every turn there is some indicator dragging us down. So despite what you might hear from Lloyd Blankfein or Jamie Dimon, this slowdown will continue and spread. We’re not going to see a real turnaround until, at least, the second year (2010) of the Obama administration. It will take that long just to work off the residue of what has already happened (never mind contending with $200 oil and a downside overshoot on home prices). Until then, buckle your seatbelts, it’s going to be a bumpy ride.

Still skeptical? Here is Irwin Kellner’s spot-on take from MarketWatch.


3 Responses to On The Economy: Don’t Believe the Hype

  1. Steve says:

    Browse the news 2001-2003 and you’ll see the same blind pessimism.

    Is this situation worse than 2001-2003? The 50% loss on overall stock market, multi billion dollar companies being wiped off, millions of individuals losing their lifetime savings, nearly collapse of the post 9/11 airline industry, corporate scandals, tech bubble explosion, massive financial/tech job layoffs etc.

    At least you should acknowledge the presidents successful efforts to put us back on track for the 4-5 years proceeding. Stock market normalization, >8 million new jobs, record homeownership stats, consistent positive GDP readings since 4Q 2001, etc.

    It seems that it takes an optimistic President to change thing for the better not a pessimistic congress. Look what happened to this Contry since the Pelosi/Reid Company got the keys to Capital Hill.


  2. Stevend says:

    If there is a President Obama, then I’ll worry. Until then, there is too much freedom to be depressed.

  3. Harrison says:

    Kentucky: Hillary 67% Obama 29%
    Oregon: 56% Obama 44% Hillary
    “Popular vote tied after primaries”

    I think the overall popular vote including all states that have voted will be a tie after tonight. I cheated a little and saw some of the results coming in for Kentucky – she is winning some rural counties by 90 – 10%. That is scary for Obama – i don’t care if these people are racist or whatever people would like to believe – a vote is a vote and every vote matters, he better start courting those voters now if he is the nominee (most likely).

    Also – I would like to say something about this campaign. During February, Hillary lost I believe 11 states straight. However, in March, after those devasting losses she came back to win in RI, TX, and OH. She then continued to do well in PA, small win in Indiana, and then 2 large wins in KY and WV. For a candidate that lost 11 states in a row – some who could have been questioned as dead right there, sure made one hell of a comeback. She won not only swing states in the fall, OH PA WV, but she won big states as well, TX (OH PA as well). I think this goes to show you that maybe Obama’s support is a little shakier than once thought. Because how do you go from slam dunk wins of 11 states, and then lose TX, OH, PA, WV, KY decisively. I do admit that those states may lean a little more to Hillary because of demographics but Obama had all the momentum in the world. He should have figured out how to court those voters then so he could have ended this nomination process. He still can’t court those voters now – and I don’t think he will in November unless Hillary is VP. Whoever wins white working class voters and Hispanics in the fall will be the president. Hillary has proven to do so, Obama has not. McCain has a better chance at doing it than Obama

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