Wednesday, October 14, 2009

81% Of Any Group Is A Big Group Of Idiots....

Back in the States, 81% of economists say the U.S. recession is over, says a National Association for Business Economics survey. The majority of respondents are signing the new status quo -- that the economy grew 3% in the third quarter. Interestingly, 54% said the economy won’t regain the jobs it’s lost during this downturn until 2012, and about a third say the worst is yet to come for home prices.
So outside of your job (your biggest source of income) and your house (biggest investment), everything should be just fine.
“We don't care what they said,” says Bill Bonner in The Daily Reckoning. “These are the same seers who missed the biggest single event in financial history. There are many banking crises, recessions, panics and defaults in the record books. But none were as great as the one that hit September a year ago. Most economists didn't see it coming; why should we trust them to tell us when it is going?
“Besides, they've got the whole thing wrong. It isn't a recession; it's a depression. There is no recovery from a depression; instead, the economy has to reinvent itself in another form. Things aren't going ‘back to normal,’ in other words. Because the period leading up to the crisis was not ‘normal’; it was a bubble. After a bubble explodes, you have a lot of debris to clean up. The bigger the bubble, the more damage it does when it blows up…
“Today, we are officially running our ‘Crash Alert’ flag up the pole here at the London headquarters of The Daily Reckoning. Cross Blackfriars Bridge and you might see if flapping in the wind, between the two huge gold balls on the roof.
“Our Crash Alert flag is out because stocks have become too expensive...and because this bounce should be reaching its apogee by now. Already, central banks are talking about cutting back on their efforts to sustain the bounce with easy credit. Australia led the way last week with a rate hike.
“It is also becoming clearer and clearer that the feds' efforts aren't really working. They can give money to their friends in the banking industry. They can give money to speculators who then make bets on the stock market, among other things. They can bail out major companies. But they can't really get much money into the real economy.”

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