Tuesday, January 22, 2008

Welcome Back Stagflation.

The market never seems to make sense. The fed cuts rates, it goes down, companies come in with good earnings its down, bad news about employment and its up. Most of the time the underlying news is not the driver. Market moves can be as mysterious as the lockness monster or a UFO sighting. Everybody things they can explain the unexplainable. In the case of the stock market people get paid big money to explain the unexplainable.

Today there is a very rational explanation. Because economists still have two hands, to the dismay of Harry Truman, there are differing opinions. On the one hand economists/traders are saying its because people are putting money on the sidelines until the bigger rate cuts predicted within the week. On the other hand, this is a major sign of deep fundamental problems with the economy.

Not surprisingly I am siding with the latter. If you have read this blog in the last month you know i have been predicting doom and gloom for the economy. Why? Because of a contracted capital market. Lenders are squeezing the amount of money their willing to lend basically because they just got burned and they are low on reserves. This course was headed straight to a recession (don't pass go), but what is happening now is leading us to stagflation scenario.

At the same time companies are spending and hiring less,and financial institutions are lending less, the federal government is going to try and flood the market again with worthless dollars. The fed wants to continue to cut rates that are still historically low, and the geniuses on the hill want to send people checks indiscriminately. The result is economic slowdown combined with worthless dollars let loose: stagflation. Its not like im the only one out there saying this, but too many pundits act like reality isn't reality or they believe that the liberal media is just making this all up.

For those of us in fairyland (otherwise known as DC) it probably wont hurt too bad. For the rest of you...


Monitor de LCD said...

Hello. This post is likeable, and your blog is very interesting, congratulations :-). I will add in my blogroll =). If possible gives a last there on my blog, it is about the Monitor de LCD, I hope you enjoy. The address is http://monitor-de-lcd.blogspot.com. A hug.

Anonymous said...

高雄人妻相簿自拍貼圖嘟嘟貼圖區一夜情成人卡通辣妹過招a片無碼性愛教學巨乳學園巨乳美女歐美影集男男同志影片一夜情人歐美潮吹影片摸摸耳18禁遊戲女狼俱樂部livesex com85cc 免費影城 nettaiwan sex色情短片胸部走光wd777 net短裙美腿艾莉絲走光熟女拉警報女優介紹141sex遙遙寫真王怡仁寫真圖片免費線上看a片正妹裸照trc俱樂部85cc免費影城85cc卡通波霸美女影片性愛世代dodo豆豆聊天室台灣1845av美女圖a片免費av女優報報模特兒寫真影片777 女人貼a片自拍色情文伊莉成人交友戀愛小站影音視訊聊天室sexy洪爺的家

Anonymous said...

Your blog keeps getting better and better! Your older articles are not as good as newer ones you have a lot more creativity and originality now keep it up!

Anonymous said...

Wow! After all I got a blog from where I be capable of really get valuable data
concerning my study and knowledge.
my website - Berber Carpet Manufacturers