The waves of euphoria that engulf Wall Street and the $2 Billion 'clunker' program, where you can get $4,500 for the purchase of a new car when turning in an older vehicle to be scrapped, will not stop the second flood of deflation that is still yet to come.
Contrary to the latest "all is getting better" headlines, the bear market is not over and the boom is not back.
Newton should have known better back when the South Sea bubble burst, back in 1720, after he lost a lot of money. This time around, the credit bubble has more bursting to do. Even with Wall Street buoyed up by the GDP report we see consumers still aren't spending. And until they do, everyone has to be wary of any recovery talk.
The main theme of desperate times calling for desperate measures, like Arizona state possibly selling its Capitol buildings, may have had a bit of respite but it'll be back, greater and harsher than ever.
Ouch!
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