That's hopium. Those charts show an unambiguous rolling over, meaning an upside down "U" shape. We can HOPE they will reverse trend and start recovering, but when you have inverted U's across every major economy in the globe, that is an ominous picture.
I have a saying for times like this. "You can piss into a tsunami heading towards you and hope to change its direction, but that's not going to change the outcome."
Hope is infectious, but reality can bludgeon hope occasionally. I'm 99% sure, this will be one of those occasions. The good news is you'll know whether hope or reality won within the next 7-10 months. It will be plenty evident by then. My guess is we'll see downward revisions in major companies in the US this quarter. We've already seen it from Intel and Dupont. That will be the first wave, followed by major revisions downward in projected growth of the SP500 and GDP for 2012. Stock prices will follow. Then in the next 7-10 months, I would not at all be surprised by a negative GDP print, unless our government is so far gone that they print it positive in the first revision and only allow the reality to leak out quietly in the second or third revisions, when the masses aren't watching.
There's only one thing that could materially change my prediction above, and that is if the Fed shoots for the moon with QE3. If they do QE3 in sufficient quantities, like a trillion dollars, then they can kick the can down the road beyond 7-10 months. However, the consequence will be even more inflation. So take your pick:
1) downturn in the economy
2) more inflation that hides the underlying rotten economic foundation
Bookmark this post and tell me if I was wrong 7-10 months from now. |
