Hi J.B.C. - very good points.
I think there just needs to be a couple of points concerning clarity of perspective:
First, as far as the market, not looking back...
Not at all imo.
finance.yahoo.com
The Dow, the S&P and the NAZ are still clearly in a Bear Market - still well beneath their highs.
That "not looking back" came off of an over-sold post 911 bottom and so far, has only been an interim Rally in a still intact Bear Market.
What is even more important... is what fueled that recovery and where we are today relative to - savings, job & income growth, debt & credit levels, Housing Bubbles, Consumer & Producer Price Levels and Trends, the Direction of the Fed Rate Hikes and the impact of ramping Energy Costs.
- that is ALL MUCH DIFFERENT and is virtually all - very NEGATIVE.
Strong Economies are not built upon financial engineering and Debt & Credit Bubbles.
Also, the US Dollar has CRATERED - which has destroyed purchasing power for the US Consumer directly into a strong "real world" inflationary ramp in everything from Housing, Property Taxes & Insurance, Utilities, Gasoline, Food, Commodities etc.
The ramping US Deficit's are something else that has changed...and is a significant overhang relative to what choices the US has in keeping the US Economy afloat...
To any rational person; it should be clear that this escalation in US Deficits, the cratering of the US Dollar, an Economy built upon a Debt, Credit & Refinance/Housing Bubble into a savingsless, jobless and wageless recovery...amidst an environment of ramping Energy Prices, War on Terrorism and Geopolitical Risk that is now dividing the Country .... is an environment of fundamental negatives that hasn't been matched since the days of Jimmy Carter and runaway inflation & interest rates.
Newsflash:
We now have an inverted yield curve between the 2 & 3 year bond...
Give me an "R"....
US GDP Revised DOWN:
8:45am 08/31/05
U.S. second-quarter GDP revised down to 3.3% By Rex Nutting
WASHINGTON (MarketWatch) - U.S. economic growth in the second quarter was revised slightly lower to a 3.3% annualized rate from 3.4% previously, the Commerce Department said. The U.S. economy slowed slightly from the 3.8% growth in the first quarter. The economy has grown 3.6% in the past year. The revision was due to an upward revision in imports and a downward revision to consumer spending, offset by an upward revision to inventory investment. Core inflation was revised lower to 1.6% annualized from 1.8% in the previous estimate. Corporate profits from current production accelerated, rising 6.1% or $79.2 billion, to $1.37 trillion annualized. Before-tax profits are up 17.7% year-over-year.
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