if you wanna put some brown streaks in your drawers....
read pg 50 article in Oct30th Business Week issue on "The Financing Squeeze"
discussed are rising corporate bond yields, profit margins squeezed, bank loan defaults, canceled IPO's, and consequent reduction in R&D and capital expenditures
Business Week is NOT a bearish journal
add 2-4 months, and presto, a flat GDP if not a recession... I point this out to warn anyone into thinking any yearend rally will be the beginning of a new bull rally... it could easily be the last leg of the current bull run... the only event to break this undesirable chain of events is the Fed cutting rates... but I doubt they will unless & until the tech stocks decline further... if this is true, prepare accordingly in your stock accounts
I HONESTLY BELIEVE THE FED WANTS A BRIEF RECESSION, WHICH WOULD CLEAR UP WHAT THEY REGARD AS A TROUBLESOME LABOR IMBALANCE
these dumb effing bastards running the Federal Reserve had better wake up... while they keep seeing inflationary pressures, they would be wise to realize that price upticks USUALLY accompany the final spurt in economic activity prior to a legitimate recession (however long in duration)... that happens (as GregMull points out) by a gradual neglect and dismantling of the productivity engines
so if the Fed continues to fight the recession, and loses sight of the larger recession threat, THEY PRODUCE IF NOT WORSEN A RECESSION
for a lesson in the dynamic, read about the last 5-6 recessions
they were all exacerbated by our equivalent of the Communist Politburo
yes, we call it the Federal Reserve
/ jim |
