Is the Economy Growing, or Are the Chances for Recession Growing?
The economy is growing; the economy may fall into recession: while the MSM consensus seems to lean towards growth - and longer term growth at that - there remain those who point to worrisome data.
Indeed, if you read or listen to MSM at all, you will have noticed that the "Goldilocks" economy has returned. One might think that this term would be laughable, since the last time Bernanke, the Fed and MSM used it was before the last recession. It was a really desperate attempt to paint a rosy picture where none existed. But, as we've pointed out before, people's memories are short, and so reviving the term should prove as effective as it was last time it was used: it will reassure people. It will make people feel good. The real issue, though, will be whether it dovetails with reality. Will the economy really continue improving on a lasting basis, or will "Goldilocks" prove as deceptive as she was last time MSM called on her?
I thought we might show both sides of the picture here and you can make up your own mind.
First, here's the "Goldilocks" point of view from Bloomberg:
The modest pace of the U.S. economic recovery has a silver lining, as the expansion shows signs of lasting almost twice as long as average.
Now, the other view: that data indicates trouble ahead, specifically weakening corporate profits and a negative number from ISM, which can signal recession. This from the San Francisco Chronicle:
"History tells us that this is a warning sign we ignore at our peril," he wrote.
Edwards notes that the ISM numbers have been on the same path as they were going into the last recession.
But he believes that the ISM's signal isn't quite as powerful as the signal being sent by the corporate profits report.
Click on the links if you want to read each article. I would if I were you. The article's aren't that long, but they each articulate their opposing positions pretty clearly. Do it and you may learn something.
Frankly, I was taken aback at how positive the Bloomberg article portrayed what are essentially weak economic data. I didn't like Goldilocks the last time, and now that she's back, it makes me wonder whether we're being set up for - to put it mildly - big disappointment.
As for the ISM and negative corporate profits, you don't read much about this, so it tells me that MSM pretty much prefers pushing the positive vs. the negative view. Now, I'm all for being positive when reality dictates a positive approach. But when there's a question about just how positive things really are, it's dangerous to take the "positive thinking" slant seriously. You'll only wind up losing money. So my own stance is to remain alert, and prudent in my decision-making. What's your view?
Indeed, if you read or listen to MSM at all, you will have noticed that the "Goldilocks" economy has returned. One might think that this term would be laughable, since the last time Bernanke, the Fed and MSM used it was before the last recession. It was a really desperate attempt to paint a rosy picture where none existed. But, as we've pointed out before, people's memories are short, and so reviving the term should prove as effective as it was last time it was used: it will reassure people. It will make people feel good. The real issue, though, will be whether it dovetails with reality. Will the economy really continue improving on a lasting basis, or will "Goldilocks" prove as deceptive as she was last time MSM called on her?
I thought we might show both sides of the picture here and you can make up your own mind.
First, here's the "Goldilocks" point of view from Bloomberg:
U.S. Expansion Poised for Longevity
The modest pace of the U.S. economic recovery has a silver lining, as the expansion shows signs of lasting almost twice as long as average.
Now, the other view: that data indicates trouble ahead, specifically weakening corporate profits and a negative number from ISM, which can signal recession. This from the San Francisco Chronicle:
ALBERT EDWARDS: Everyone's Worst Fears For The Stock Market And Economy Have Been Confirmed
"History tells us that this is a warning sign we ignore at our peril," he wrote.
Edwards notes that the ISM numbers have been on the same path as they were going into the last recession.
But he believes that the ISM's signal isn't quite as powerful as the signal being sent by the corporate profits report.
Click on the links if you want to read each article. I would if I were you. The article's aren't that long, but they each articulate their opposing positions pretty clearly. Do it and you may learn something.
Frankly, I was taken aback at how positive the Bloomberg article portrayed what are essentially weak economic data. I didn't like Goldilocks the last time, and now that she's back, it makes me wonder whether we're being set up for - to put it mildly - big disappointment.
As for the ISM and negative corporate profits, you don't read much about this, so it tells me that MSM pretty much prefers pushing the positive vs. the negative view. Now, I'm all for being positive when reality dictates a positive approach. But when there's a question about just how positive things really are, it's dangerous to take the "positive thinking" slant seriously. You'll only wind up losing money. So my own stance is to remain alert, and prudent in my decision-making. What's your view?
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