Google closed down 48 points. That is tough when you actually own the stock and it goes down almost 10% in a day. Microsoft saved the day for investors by putting a bid in for Yahoo for $44 billion dollars. The markets rallied despite bad economic reports. The technicals still indicate we are in a downtrend, but I must admit it is tempting to start buying again now with the nice mini rallies we have been having. Interesting side note, Google has lost $72 billion dollars in value in 3 months which is almost double what Microsoft is buying Yahoo for.
Unfortunately, the problems we are experiencing in the economy haven’t disappeared so I must be conservative with my nest egg portfolio that has taken time to build up. I think the reports that are coming out about the economy will continue to get worse. There are many denials by analysts and government officials that we are not in a recession but just in a slow down. This is a pattern just being repeated that we saw housing prices spiraling into impossible prices. No one wanted to believe the prices were inflated and now here we are.
The next president of the United States is going to inherit some ugly problems that this current president created. We are still in Iraq and even though no progress has been made since we invaded, the White House refuses to acknowledge the truth. We are in a recession, and the White House refuses to accept that. They seem to believe if you don’t say it, then it can’t be. Pure denial that is hindering us to recover and create solutions to fix the problem.
I like low interest rates and getting refund checks, but that will not fix our economy. Artificial low rates 6 years ago at 1 % contributed to this housing bust where we are seeing over a million foreclosures now. Printing up rebate checks by increasing the national debt doesn’t seem practical either. Wouldn’t it be amazing if we withdrew our troops and stopped wasting billions of dollars every year for upkeep in Iraq and diverted all the money spent back into the US on goods and services, the economy would stabilize. What a concept! Could it be that simple? I am sure it isn’t but that would be an excellent base to start from.
| DOW | 12,743.19 | +92.83 |
| NASDAQ | 2,413.36 | +23.50 |
| S&P 500 | 1,395.42 | +16.87 |
I read an interesting article about Jim Roger’s current views and found this a bit profound:
“I’m extremely worried,” he says. “I have been for a while, but I just see things getting much worse this time around than I expected.” To Rogers, a longtime Fed critic, Bernanke’s decision to ride to the market’s rescue with a 75-basis-point cut in the Fed’s benchmark rate only a week before its scheduled meeting (at which time they cut it another 50 basis points) is the latest sign that the central bank isn’t willing to provide the fiscal discipline that he thinks the economy desperately needs.
“Conceivably we could have just had recession, hard times, sliding dollar, inflation, etc., but I’m afraid it’s going to be much worse,” he says. “Bernanke is printing huge amounts of money. He’s out of control and the Fed is out of control. We are probably going to have one of the worst recessions we’ve had since the Second World War. It’s not a good scene.”
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The last Jim Roger’s bit is true. All I see are quick fixes or temp relief measures, but you do not see any good long term plans that while might give short term suffering, can bring long term reward. I only see the US and world economies continue sinking from this point onwards.
Hi YC,
I agree with your assessment. Even though I have kept saying we are in a recession in the US, I really just felt it was a natural part of the business cycle and we would get through it soon enough. We have too much excesses in the housing and stock market and a slowdown would balance that out. Interestingly enough, Jim Rogers now lives in Singapore per that article.
Cheers!
Although I agree with what you guys are saying about the economy, there is no recession. The Federal Reserve is “scaring” America and Congress into implementing a stimulus that would actually weaken the US. Since these private bankers own our money, they can take us out of a recession at any minute buy putting more money into circulation. This has been the case since 1913. Do the research. The best related documentary is “Freedom to Fascism.” Google it on Google video. There you will find the truth about what is happening to America and the rest of the world, from one of the bankers closest friends, Aaron Russo.
Hi Amadeus,
I appreciate your opinion but disagree completely. We are in a a recession and it has nothing to do with the Federal Reserve. I have done my research and the documentary on Freedom to Fascism is outdated and slanted in its views. That is not the truth but just a theory. One that I don’t agree with. If you live in the states, you can not deny the massive layoffs we are having, the reduction of housing values, decreased discretionary spending, higher costs of living, and record number of foreclosures. This problem is bigger than any rate cut the federal reserve can grant and printing more money will not solve this Recession.
Thanks for your comment.
Cheers!
Hi guys, I’m not an expert on these things and I simply go with ground sentiment. Theories are great but the true assessment of whether there is a recession or not is to look at what’s happening to the common man. Value of money is dropping but salaries are not going up, people are getting laid off and there are not as many jobs available for the average person despite media reports, more people are trying to cut spending due to decreasing spending power etc. It might not be recession per se but it is moving there.
YC’s last blog post..Make Money Online - Excuses Part 3 Zero Resistance Living
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