Talking up the economy
Here we go again. This is the beginning of 'talking up of the economy'. This will be very similar to the 'talking down of the economy' in December of 2000.
<a href="http://money.cnn.com/2002/01/24/economy/greenspan/index.htm"; target="_blank">http://money.cnn.com/2002/01/24/economy/greenspan/index.htm</a>;
Of course, the recovery won't happen overnight. It will take most of the year for people to bounce back. Look for the economy to recover in September in October.
<a href="http://money.cnn.com/2002/01/24/economy/greenspan/index.htm"; target="_blank">http://money.cnn.com/2002/01/24/economy/greenspan/index.htm</a>;
Of course, the recovery won't happen overnight. It will take most of the year for people to bounce back. Look for the economy to recover in September in October.
Comments
<strong>Here we go again. This is the beginning of 'talking up of the economy'. This will be very similar to the 'talking down of the economy' in December of 2000.
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For crying out loud, Fran. How is that you believe such crap?
On the flip side, if people tell them that things are getting better, they might spend a little more freely, hire more people, and it is easier to get creditors and investors to put money into the market (causing businesses to grow).
It just strikes me as very odd that despite the airlines being in huge trouble, a major retailer like K-Mart filing for bankruptcy, and a major corporation like Enron filing for bankruptcy, along with unemployment still rising, we are all of a sudden told that things are getting better.
<strong>The economy is heavily based on perception...</strong><hr></blockquote>
Right. Things like investment, debt loads, venture capital activity, capital costs, etc. all are just minor factors.
[quote]<strong>If people that are in higher up places tell them to 'brace for a recession',...</strong><hr></blockquote>
I hate to break it to you but the economy had already cooled considerably by December of 2000.
[quote]<strong>they might start saving more money (less spending)...</strong><hr></blockquote>
Except that didn't happen. Consumer spending didn't drop very much at all. Housing stayed fairly strong.
[quote]<strong>It just strikes me as very odd that despite the airlines being in huge trouble, a major retailer like K-Mart filing for bankruptcy, and a major corporation like Enron filing for bankruptcy...</strong><hr></blockquote>
Recessions weed out failing companies. What's so odd about that?
[quote]<strong>... along with unemployment still rising...</strong><hr></blockquote>
Employment is a lagging indicator. It won't pick up until the recovery is well underway.
[quote]<strong>... we are all of a sudden told that things are getting better.</strong><hr></blockquote>
Greenspan has been slashing interest rates for a year now. I would hope (and clearly he does too) that would begin to have an effect sooner or later.
[ 01-25-2002: Message edited by: roger_ramjet ]</p>
Yes, but corporate spending dropped off tremendously.
[ 01-25-2002: Message edited by: Fran441 ]</p>
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Yes, but corporate spending dropped off tremendously.</strong><hr></blockquote>
Well yes. Most of the bloodshed in this recession has been on Wall Street. Some $5 trillion in market capitalization has been lost since March of 2000. That's a pretty serious hit. There was no way that corporate earnings would turn this situation around quickly. Corporate profits never did justify such high valuations in the first place. Instead, share prices were painfully adjusted to reflect the real world. Most companies, hoping to regain their footing, turned first to an obvious remedy - cutting costs and deferring spending. But that only gets you so far. Now they'll have to seek new opportunities to increase market share which means new spending.
<a href="http://money.cnn.com/2002/01/30/economy/economy/"; target="_blank">http://money.cnn.com/2002/01/30/economy/economy/</a>;
<strong>Look at this. The economy grew last quarter.
<a href="http://money.cnn.com/2002/01/30/economy/economy/"; target="_blank">http://money.cnn.com/2002/01/30/economy/economy/</a></strong><hr></blockquote>;
Yea and it's all because of Bush's trickery. Damn him!