I think USA Today (a very liberal newspaper by the way) has been smoking some heavy weed if it thinks that the U.S. economy is growing. The key statistic is private sector job growth and in that area this administration has been awful! However the final paragraph is pretty much spot-on (Some advice for investors). The way to jump start private jobs growth – cut business taxes, each state should reduce its payroll taxes, and cut spending.
by Adam Shell
The images of bread lines, dust storms and squatters’ camps are missing in the aftermath of the worst financial crisis since the Great Depression. Stocks have rebounded sharply from the 12-year low hit in March 2009 during the Great Recession. The U.S. economy, while still sluggish, is growing again. And fears of financial Armageddon have mostly faded.
Yet comparisons to the woeful 1930s continue to pop up in Wall Street research reports, newspaper op-ed pieces, doomsday books and the financial blogosphere. There is a nagging sense that the roller coaster ride investors have been on since the 2008-09 financial meltdown may not be over — and that a ’30s-style boom-bust, boom-bust cycle can’t yet be ruled out — as the economy and markets muddle through the difficult post-bubble workout period.
The Dow Jones industrials’ 261-point plunge Friday sparked by a sharp drop in consumer sentiment in July highlights that gloominess persists.
Fueling the angst is fear that the still-fragile, jobs-starved economy will suffer a relapse, or double dip, as government stimulus is phased out. Consider:
•In a recent note to clients, David Rosenberg, chief strategist at Gluskin Sheff, ticks off a slew of similarities between then and now under the heading, “Daring to Compare Today to the ’30s.”
•Donald Luskin, chief investment officer at Trend Macrolytics, penned an op-ed piece, “Why This Isn’t Like 1938 — At Least Not Yet.”
•In late June, Paul Krugman, professor of economics and international affairs at Princeton University and an op-ed columnist for The New York Times, zeroed in on the issue twice under provocative headlines: “That ’30s Feeling” and “The Third Depression.”
Why all the hand-wringing over the ’30s? “To focus people on risk and remind them that it is way too early to declare victory,” Luskin says. “It is prudent to learn from past errors so we don’t repeat them.”
Stock charts that overlay current stock-price action to that of the 1930s look very much the same at similar stages of the recovery. The difference is 80 years ago the market suffered another major down leg. The future will show if the market suffers a similar fate, or whether it stabilizes and powers higher.
“The similarities are scarily similar,” says Richard Suttmeier, chief market strategist at ValuEngine.com. “Essentially, in the ’30s we were in unchartered waters, and we have been in unchartered waters since 2008.”
[..]
Some advice for investors
So how should one manage money in an era of unpredictability and volatility?
Rosenberg advises investors to stay liquid, keep debts low, save more and invest less in risky assets like stocks. He doesn’t advise 100% cash. Buy some gold, high-quality bonds and assets that don’t go up or down with stocks, he says.
“If you were putting a dime in a cookie jar, maybe stick in 20 cents,” Rosenberg says. “If you have the capacity to live a frugal life, do so.”
In periods of great volatility, where stocks have the potential to post huge gains — and huge losses — it makes sense to put only half the money you would normally devote to stocks in the market, Luskin says. Thus, you will be able to book gains if stocks rally. And you will lose half as much if stocks plunge.
Read the rest Comparisons to the Great Depression keep popping up
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Tags: Great Depression
Or as Obama would call it, “The Great Equalization.”
USA Today = McPaper.
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@ coldwarrior:
Do you think that decade started September 2008, or when Оба́ма took office on 01/20/2009?
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@ Macker:
The second Hank Paulson gave that speech where he looked like he was going to pee himself if he didn’t get a jillion dollars RIGHT NOW.
what surprises me is that krugman, the once brilliant economists now turned pop-econ writer, is actually bad mouthing the economy in the NYT
@ coldwarrior:
I guess he’s finally realized that the economy ignores Keynesian cheerleading.
Bumr50 wrote:
keynes is mis-applied, these govt actions arent what he was saying, and i am not a keynesian.
@ coldwarrior:
Understood.
But that doesn’t stop the Left from citing him, albeit wrongly.
I’ll say it one more time. This is a “feature”, not a bug. This is the crisis they won’t waste. WPA rev 2.0 is coming.
@ coldwarrior:
Keynes is being dragged through the mud by the neo-Keynesians. His basic thesis is wrong, but he never advocated unlimited debt.
@ snork:
the ironic thing is that all the stimulus money could have been put into a wpa style system and fix the failing roads and bridges that we have.
but that would mean peeps actually working and no slush fund for 0 to use in the upcoming elections
snork wrote:
again, i’m no keynesian so i wont defend his ideas, but you are right, this is not what he meant.
It is only going to get worse.
coldwarrior wrote:
That was the bait. Remember “shovel ready”? Then came the switch.
snork wrote:
you know it.
unfortunately, we missed an opportunity to actually apply some keynes to the economy, fix a big problem in the process, and see if it worked.
(i would have done that and there would have been no wall street bailout, no takeover of gm, etc)
Speranza wrote:
it can always get worse, we could have an outbreak of airborne spread ebola
bbl…gotta go chase a little white ball around a well manicured park
Macker wrote:
“It’s the one paper that isn’t afraid to tell the truth – everything’s fine!”
Homer Simpson
@ coldwarrior:
The same Krugman that constantly predicted a coming recession/depression all through the Bush years? The guy is an economic pessimist. Luskin has been hammering on this stuff for years.
What Depression?
Eternal fun-employment for all.
Love your new frugality.
Soon there will be gov. pamphlets: “One Hundred Ways to Cook a Can of Beans.”
@ chickadee:
101 Things to Do with Ramen Noodles
coldwarrior wrote:
This was a way for Obama and his cronies to make money.
Another sharp stick in the eye. Bill being signed at the Reagan International Trade building.
http://news.yahoo.com/s/afp/20100721/ts_alt_afp/usfinanceeconomypoliticsregulatecongressobama
coldwarrior wrote:
What you gonna do when you catch it?
@ gulfloafer:
No shame. None.
Anybody see Breitbart on GMA this morning?
Also in todays NY papers:
Lazio: Cuomo `incompetent’ for inaction on mosque
http://www.timesunion.com/AspStories/story.asp?storyID=952426
Just to show ya we’re not all crazy here in the Empire State – not even if from downstate ! You go Rick !!
@ gulfloafer:
Nope, but he was on with Media Matters so I hope he girded.
GMA on now, Pacific Time.
OMG! It’s a full on vindication. Stepanopolis: “Your father was killed by the KKK.” Where the hell did that come from?
USA Today economists
@ gulfloafer:
Read this.
Forty Acres & a Mule — Sherrod Style?
gulfloafer wrote:
That’s actually false. Her father was killed by a white farmer, but she’s not alleging that he was a klansman. The white liberals just assume that any white southerner who kills a black man has to be klan.
There’s also nothing that I’ve seen about the circumstances; was it a bar fight, a hunting accident, this needs to be clarified.
So far this morning I’ve watched three negative commercials depicting Sharon Angle as a wacked-out extremist. Negative ads don’t work? Bullshit! Ask Nv state senator Joe Heck about that. A woman with no name recognition in the state wooped his ass soley on negative campaigning. Falsely! Never even debated him.
@ snork:
@ gulfloafer:
What no one is mentioning is her Marxist outlook. She said it’s more than race, it’s about rich and poor. She then says the Rich manipulate the poor through race tensions. This is straight up Marxist. That should diqualify her right there.
@ snork:
SNCC:
Context.
@ Rodan:
Last night Beck said that in THIS White House she should’ve been given a PROMOTION!
Rodan wrote:
Yeah, she’s a history scholar as well.
@ gulfloafer:
The whole point also being is missed is how the NAACP audience cheered when she got racial.
Rodan wrote:
That was Breitbart’s position in response to the NAACP’s charge of Tea Party racism. He was totally dismissed.
@ Rodan:
NAACP Confirms Election of a Black President Made No Difference
/Dennis Prager
Excerpt:
@ Rodan:
NAACP President Jealous was IN that audience.
coldwarrior wrote:
or they can work to repeal the 22nd amendment and he legalizes all the illegals and he is our POTUS for the rest of our lives.
The NAACP sure has turned into a protection s racket haven’t they?
@ gulfloafer:
Context! For We, But Not For Thee
@ snork:
They’re the VICTIMS!
Get it?
//
“White Racism” the all-purpose alibi
@ BuddyG:
yeah Non Whites can’t be racist
/
Everything’s neato-Keynes.
Bumr50 wrote:
Fixed it for them
Sept 2009 ABC News Charlie Gibson says ABC didn’t cover the ACORN story ’cause he “didn’t even know about it” and went on to say “Or maybe this is just one you leave to the cables”
July 2010 CBS News Bob Schieffer says he didn’t ask AG Holder about the Black Panther Thing because he “didn’t know about it”.
Andrew Dice Clay “You’re supposed to be a news guy, where are you getting your fu*king information?”
(a very memorable appearance on CNN)