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Stock market researcher, investor
  • Economic Recovery: Mainstreet Need not Apply [Edit or Delete]0 comments
    Jun 17, 2011 8:31 AM
    Fact 1: The blog obsession with Greece rages on, despite the fact that huge funds have already moved on. That's why stocks are surging yet again today. Greece like the BP oil spill, Libya, and Japan earthquake generate a lot of discussion but little economic impact. Sorry. 
    Fact 2: The economy is recovering even without job creation and without the participation of mainstreet.
    Robert Reich is wrong to equate job creation with economic recovery. The Obama stimulus failed because there's no need for companies to hire expensive, slow American labor when they can report blowout profits and earnings using insourced/outsourced labor and automation. High unemployment, people falling between the cracks, more food stamps, more poverty, downward mobility is still compatible with strong earnings growth, especially thanks to a weak dollar and exports. 
    Do keep in mind the PE ratio for the S&P 500 is still 15 and if history is any guide earnings and profits will continue to be blowout just as they have been for the last 10 quarters. 
    Voters are tired of the debt, tired of China's increasing influence over economic matters, tired of endless war, tired of no job creation, tired of pain at the pump, tired of crappy infrastructure, tired of surging costs of living and politicians & fed being completely oblivious to it, and tired of politics as usual. 
    Regardless of who wins in 2012 none of those things will change because globalist, pro-market, pro-growth forces are at work designed to squeeze mainstreet and line the pockets of the Creators. The so called 'knowledge economy' and 'reputation economy' and 'would-you-like- fries-with-that economy' and 'facebook economy' is what matters. Somehow good paying, middle class jobs are left out of that equation.  Good jobs still exist for non-MIT phds but they are becoming increasingly rare. 
    If the 'free market' wants more infastructure jobs jobs we'll have more infrastructure jobs. If the market wants more productivity and more exotic financial instruments we'll have that. But we can't have both.
    With 50% (and growing) of S&P 500 earnings coming from foreign countries it's of little surprise that most CEOs, politicans, and economists are indiffernt to the needs of mainstreet. And when a leftists like Robert Reich wants to force companies to hire it's only met with laughter. lol
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