Thursday, April 15, 2010

Time out for common sense

The Fed and their economists and the media are reporting that we are in a recovery mode, merchants are selling products and consumers are spending money, and overall we are up 1%. Based on this information a stock market bubble has expanded, potentially ruining thousands of investors when this new bubble deflates abruptly.

And it will!

Common sense dictates that while we are given positive information, and especially where the government is concerned, there is always a flip side to analyze. That is unless you enjoy being led once again to the slaughter.

The Flip Side

The FED also reports that the job market hasn’t improved and remains at 9.7 percent, which equates to more than 17.3 million people still looking for a job. Yes we hear about the 162 thousands jobs created, such hyperbole has not gone unchallenged, the flip side was that another 430,000 new filings for unemployment also occurred at the same time.

Additionally the government acknowledges that there are 8.9 million borrowers currently in default, and facing foreclosure.

Economist further estimate that a percent of these 8.9 million homeowners that are in default are spending money in aid of the economy because they aren’t making their mortgage payments, and the figure, they believe represents 1% increase in consumer spending, coincidence?

Ok, time to use common sense, that sound judgment we were all born with.

Given the real facts, it is obvious there is NO recovery, but the illusion of a recovery which is based of a false assumption. When we see real jobs being created, and that number MUST exceed 300,000 net jobs a month then we can say a real recovery has begun.