Bulls versus Bears

It is as unimportant as the amount of sun shine in the desert is important to global rice harvest. For starters, third-quarter 2009 US GDP was heavily inflated with the brain fart first-time home buyer tax credit which lifted housing activity, and with the socialistic joke cash for clunkers program which gave a boost to production. On top of that the GDP figure benefited from some inventory rebuilding after almost two years of inventory contraction. The reason for the build in inventories was that most have subscribed to the recover illusion and hope for increased demand. A weak U.S. Dollar added to exports, although it was a rather minor contributor.

Fourth-quarter GDP may show a 0%-1% increase, but do not be surprised to see a negative GDP figure. All current reports point to a contraction or rather a continuation of the recession. A one month increase in GDP does not signal the end of a recession. The real GDP figure is actually negative once you add how much the U.S. Dollar deteriorated during the third-quarter. The real GDP tells the real story while the artificial or inflated GDP figure tells you the fake story the socialists want and need to tell in order to keep the illusion alive. Cash for clunkers is gone, home tax credit will expire, but even with it still intact housing figures contract which shows how pathetic the socialists really are, inventories will not increase that much further and soon the socialists will create a second stimulus in order to stimulate the deficits some more.

Consumer spending will remain absent and so will job growth, regardless of what the socialists come up with. At least it will provide a few with good laughs, but the majority will suffer as a direct result of what they screamed, wanted and in the end voted for. The socialists not only lack the knowledge and understanding, but they also fail to realize that the economy is not something that you play with as it impacts the majority directly and immediately. The last $787 economic cardiac arrest plan and lousy joke of a socialistic attempt to be funny which has been porked up to 'cardiac arrest levels' has created roughly twenty thousand short-term jobs at an average cost of $39,350,000 per short-term job. The socialists will claim that the majority of the funds have not been wasted yet, which is another clear indicator that the $787 economic cardiac arrest plan was stimulated the deficit and nothing more.

Consumer incomes will continue to stagnate, confidence will deteriorate as more and more facts will be evident that there will be no sustainable economic recovery. The housing market will sink to new lows, the credit card crisis has not even ignited yet while the commercial real estate crisis will hit the markets over the next few months. Global equity markets are at least 70% over-valued at current levels and the U.S. economy will deteriorate over the next decade and beyond, while some trading partners will prosper.

The U.S. financial systems is roughly $2 Trillion underfunded, the weak U.S. Dollar pushes commodity prices higher and will further dampen retail sales and crush consumer confidence and sooner or sooner the recovery myth will disappear and reality will set in.

The Dumb Money camp will not be able to, and unfortunately 99.8% are part of that camp.