Hey! A view we can use!
Date: Fri Apr 16 2004 14:53
trotsky (Goldfish) ID#377387:
Copyright © 2002 trotsky/Kitco Inc. All rights reserved
in reference to the continued decline in industrial and commerical lending, as well, i presume, that in commercial paper issuance, you assert:
"They don't need to borrow when they can raise more capital via equity increases.
VERY bullish for the overall economy."
to which i say, you're deluding yourself. the above are well-known INDICATORS of the extent of economic activity on the part of corporations, when they decline, it's not a sign of economic recovery, but rather the opposite. look at past ( genuine ) recoveries for reference.
btw., the average post WW2 recovery would at this stage have created nearly 10 million more jobs than the current one has - no surprise really, since the recent upswing in certain economic data is merely a credit-induced echo bubble - largely based on the continued expansion of the ultimately doomed mortgage credit bubble, and the associated excessive consumption. the capital investment cycle can be expected to resume in about 7 to 8 years if past experience with this cycle is any guide.
in the meantime, capacity utilization has again begun to fall from already extremely depressed levels. the economy's output gap remains as large as ever - the recovery is probably already toast, to give way to the consumer recession which the mortgage credit bubble has heretofore artificially forestalled. again , based on historic precedent, it should be a good sight worse than the first post-bubble recession cycle. |
