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Strategies & Market Trends : Classic TA Workplace -- Ignore unavailable to you. Want to Upgrade?

To: NOW who wrote (22169)	11/25/2001 11:23:02 PM
From: John Madarasz	Read Replies (1) \| Respond to of 209892

suffice to say that it's the status quo argument...the omnipotent FED one. 0% interest rates and additional low interest debt loads (incl. cash out advances against a topped out real estate market) will only serve to offset any small upside changes in household savings for the intermediate term (6-12 mos at least), i believe. The small advances in some economic indicators, now occurring here and there, are natural anomalies in long term bear markets, overshadowed by much larger problems that have yet to be resolved; and yet they always seem to fool the most people the most times. Household net wealth PLUNGED to almost -15% in June of this year from 15% in 1999...the lowest level since WWII by 100%! In the nine recessions since 1946, every one was preceeded by a drop in household wealth of between 6 and 10%. This latest plunge was almost 30%. The real recession hasn't even started... I think this is really the last hurrah in regards to the consumer who is supposed to drive the recovery. Strong dollar continues to hurt big business exports, and there's no foreseeable change there for the time being, but The FED can't continue pumping like this forever...they are betting that their monetary stimulus can outlast a shrinking economy here and abroad, I don't think that it will... and when they pull back on the reigns, the real trouble begins. If the war continues to go well, dollar stays strong and hurts business abroad, and the now questionable economic stimulus package gets shuttered. If the war takes a turn for the worse...well, not good. History has ALWAYs shown that the more a government meddles in economics, worse the unwinding becomes. Why should this recession to be be any different? Three things will hold the economy back i believe longer than most expect...debt, debt and debt, and i don't think it can be wished away. Denial usually seems to have a cumulative effect, and does the most damage long term. of course i could be completely wrong, but i think there will be a MUCH slower recovery in the cards than Kasariel is projecting. Naturally it will happen though.