Whatever I said yesterday about a depression being likely, I really don’t mean it. We’re going to experience a slowdown because we’re running hot and need to consolidate positions. Also, jobs reports are going to look worse than they are because the millions of people who were taken out of unemployment statistics, but were really always going to start looking for work again, are coming back.
In many respects, that’s a good thing.
Our economy’s due for a correction, the dollar’s due to strengthen, and there’s a lot of shit coming up in the next two to three years, like healthcare reform compliance issues. So people are taking a foot off the pedal and industry is slowing down a bit.
I really don’t think this ends in the Great Recession 2.0. I think it ends in politicians rethinking some of their mandates on the economy and a large cessation of power from government. However, if Europe gets crushed enough, then it may drag us back into a downward move as trade dries up.
But depressions, unlike recessions, are very difficult things to get yourself into. They require apathy – one might even suggest intent – to refuse to help yourself out. A refusal to accept losses and restructure things must be ingrained.
In the world of prices, I anticipate the market retraces over summer while bonds, being subject to tax revenues which are about to be reduced once again, are also shunned. Cash is king, especially the dollar, unless the Fed starts currency bombing (they don’t need to buy treasuries, that’s just their favorite move. They could also just start buying assets on public markets). Select equities will also perform well (see my portfolio). Crude is shit.
But I think Bernanke & Co. is interested in letting things settle and seeing if they don’t find a bottom on their own. The patient scientist must observe, now and again, without interfering too much.
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the depression 2.0 is not off the table. how many part time jobs must one have in order to maintain the lifestyle that most people had with one job? and that would be most people of middle age,who never thought in a million years that could be “forced” from a 70k-120k per anum, to less than 30k. i am very sorry, but i must disagree with your findings, with all due respect.
I wouldn’t say they’re findings. More like conjectures.
Despite life being bad for many people right now, for those who are on the in, things are going very well. Negative news needs to be taken with a grain of salt.
” A refusal to accept losses and restructure things must be ingrained.” That is exactly what I see happening. A refusal to accept losses and allow markets to find a true price.