Mish's Global Economic Trend Analysis Message Board

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Strategies & Market Trends : Mish's Global Economic Trend Analysis

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To: jimmg who wrote (62313)	1/19/2007 1:15:45 PM
From: mishedlo	Read Replies (2) of 116555

4. Real wage gains are at cycle high. 4a.Real wages gains are negative and exceptionally negative for the masses. Those gains are distorted by exceptional gains at the top end. The savings rate is negative for a record 18 straight months 5. Lower oil and gas freeing up discretionary spending dollars. 5a.Oil and gas prices are falling because the economy is weakening. You have this ass backwards. 6. All-time high corporate cash flows going into share repurchases and shrinking the overall equity base. 6a. That is a sign that corporations have no incentive to expand. They are burning up cash instead with buybacks. Your argument is ass backwards. I can go on for a long time. You get the picture. I have no problem accepting the argument that current strength in unsustainable but to argue that the economy isn't currently robust lacks credibility. It is your argument that lacks credibility. You overlook foreclosures, bankruptcies, and what is really happening with wages. You do not seem to understand that corporations buying back shares (while insiders are bailing like mad) means that corporations see no reason to expand their businesses. When it comes to jobs they are a lagging indicator and even there much of that job growth has been housing related or service sector retail & restaurant etc. The latter is not exactly high paying. You totally overlook a GDP that fell to 2%. That alone says you are wrong. Since when is 2% a "strong economy"? The stock market is soaring because average Americans are spending like there is no tomorrow. Most bears think it's all a conspiracy by Pig Man, Da Boyz, the Cabal, Goldman Sachs or whoever. It's not a conspiracy, but it probably is not what you suggest either. What it is is a sign of willingness to speculate. When that sentiment changes anyone knows but the stock market itself is NOT a sign of a strong economy. I might point out that an inverted yield curve and plunging housing permits is definitely a sign of weakness (impending recession). Did you see my post on leading indicators? globaleconomicanalysis.blogspot.com Those indicators say you are wrong. I repeat there is no basis to say the economy is strong right now. There just isn't. Not in aggregate. If you want to say things are not as weak as bears think, perhaps you are right but to call things strong is cherry picking the best of the data while ingnoring everything on the other side including the GDP itself. All you have is a slight uptick in jobs and low unemployment (generally lagging indicators IMO). Mish

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