Wall Street Baffled by Slowing Economy...

[posty 2,296]

http://www.cnbc.com/id/43236764

 

Wall Street is having a hard time figuring out what to do now that the U.S. economy appears to be sputtering and yields are so low, Peter Yastrow, market strategist for Yastrow Origer, told CNBC.

 

"What we’ve got right now is almost near panic going on with money managers and people who are responsible for money," he said. "They can not find a yield and you just don’t want to be putting your money into commodities or things that are punts that might work out or they might not depending on what happens with the economy.

 

"We need to find real yield and real returns on these assets. You see bad data, you see Treasurys rally, you see all bonds and all fixed-income rally and then the people who are betting against the U.S. economy start getting bearish on stocks. That’s a huge mistake."

 

Stocks extended losses after the manufacturing fell below expectations in May and the private sector added only 38,000 jobs during the month.

 

"Interest rates are amazingly low and that, thanks to Ben Bernanke, is driving everything," Yastrow said. "We’re on the verge of a great, great depression. The [Federal Reserve] knows it.

 

"We have many, many homeowners that are totally underwater here and cannot get out from under. The technology frontier is limited right now. We definitely have an innovation slowdown and the economy’s gonna suffer."

 

However, he said he wouldn’t sell stocks.

 

"Any bears out there better be careful because the dividend yields on these stocks look awesome relative to all the other investment vehicles out there," Yastrow said. "So bears are going to have to find a new way to express their discontent with the U.S. economy."

[Phurfur 70]

We all know the problem whether we want to admit it or not, actually you could say this was predicted. I think it is the news source that is confused.

[RLLD 3,455]

Really.....huh, how about that, I wonder if anyone warned any of us, say four or five years ago that this was coming, and was laughed at or something....

[IMMensaMind 460]

Baffled, I tell ya: baffled!

 

What: did they interview only Wall Street leftists? Because I can focking well tell you that not only was this predicted by fiscal conservatives, I can tell you that we're about to double dip HARDCORE.

[DankNuggs 305]

because the entire rally is just a speculative bubble... dow went from 6600 to 12500 on nothing but speculation, i expect it to fall under 10k by end of summer... Article is chastizing people who are bearing and telling them to go long...i.e. inflate the bubble again... too bad there aren't as many suckers to drive their fake yields...

[Greedo 13]

We've, by economic definition, had an 18 month expansion. Not sure this qualifies as a double dip.

 

I think the market's waiting to see what's going to happen with the federal deficit, and go from there.

 

It's real easy to be a permanent Henny Penny - even a stopped watch is correct twice a day. But it's been a fun ride up, financially, for the past 2 years. I was buying when the Henny Pennys were saying we'll never recover.

[DanXIII 8]

I'm not sure why they're baffled. Government spending is being cut. Companies are sitting on their cash, not making capital purchases and not hiring. In a consumption-based economy it really isn't that difficult to see what's ahead.

 

On the plus side, we'll probably get a new president next year! On the minus...I'm not sure he'll be able to do anything with this train wreck either.

[Strike 4,003]

Really.....huh, how about that, I wonder if anyone warned any of us, say four or five years ago that this was coming, and was laughed at or something....

 

The smart move at that time would have been to take advantage of the situation, to benefit personally. I wonder if anyone did that, say four or five years ago and bragged about it.....

[RLLD 3,455]

I'm not sure why they're baffled. Government spending is being cut. Companies are sitting on their cash, not making capital purchases and not hiring. In a consumption-based economy it really isn't that difficult to see what's ahead.

 

On the plus side, we'll probably get a new president next year! On the minus...I'm not sure he'll be able to do anything with this train wreck either.

 

This. When government cuts spending it has the same net effect as raising taxes, which itself is also being mentioned in greater frequency. If you are becoming bearish on the notion of government spending, the economy takes a hit on that alone. Add to this the capital issues being faced by lending institutions and problems persist.

 

The correction will continue for some time, there will be slight rises here and there, but there is years more to go....

[Phurfur 70]

I'm not sure why they're baffled. Government spending is being cut. Companies are sitting on their cash, not making capital purchases and not hiring. In a consumption-based economy it really isn't that difficult to see what's ahead.

 

On the plus side, we'll probably get a new president next year! On the minus...I'm not sure he'll be able to do anything with this train wreck either.

 

Really? Where? It took them months to agree on a budget that cut less than 1% from a budget that will run a $1.6 trillion deficit. Where do you live?

[Voltaire 4,569]

Really? Where? It took them months to agree on a budget that cut less than 1% from a budget that will run a $1.6 trillion deficit. Where do you live?

 

Even more than these small cuts, he probably also means the stimulus money has dried up and will not be replaced.

[Phurfur 70]

Even more than these small cuts, he probably also means the stimulus money has dried up and will not be replaced.

 

I thought there was still a couple $100 billion left. I could be wrong but I believe this slush fund was set up for a 4 year spending spree.

[RLLD 3,455]

I thought there was still a couple $100 billion left. I could be wrong but I believe this slush fund was set up for a 4 year spending spree.

 

The most accurate post of your to date...

[DankNuggs 305]

I thought there was still a couple $100 billion left. I could be wrong but I believe this slush fund was set up for a 4 year spending spree.

There is a ton of $$$ left, it will be spent in the run up to the election... Its a slush fund...

[Phurfur 70]

The most accurate post of your to date...

How embarrassing for you but then you are used to putting your foot in your mouth. This is from Feb. 5 2011

 

It’s not that all the stimulus money has been spent; it has been committed for specific projects and programs. In the confusing money flow from Washington to the rest of the country, there’s still about $168 billion in stimulus money that has not actually been paid out, according to the administration. But it says nearly all of that money already is tied up in contracts with companies, obligations with states and local governments, promised taxpayer relief and commitments to government programs.

 

http://www.spokesman.com/stories/2011/feb/05/despite-gop-plans-most-stimulus-money-is-spoken/

[cyclone24 1,814]

What does Sean Hannity say about it? Because thats what i think.

[Voltaire 4,569]

I thought there was still a couple $100 billion left. I could be wrong but I believe this slush fund was set up for a 4 year spending spree.

Looks like you're right. "is drying up" would be more accurate.

 

The economy had been propped up with some Keynesian deficit spending which is coming to an end. When that $168 billion runs out, the chance of seeing any more stimulus money is: zero.

 

Meanwhile politicians are dillydallying. Who knows how serious the politicnas are about this game of chicken with the debt limit. Irresponsible people who really don't give a fock if we default exist on both the right (IMMensaMind) and left http://apps.detnews.com/apps/blogs/politicsblog/index.php?blogid=17383 and they make me nervous. Who knows if/when the bond markets will freak. Could happen at any time.

[BLS 313]

This. When government cuts spending it has the same net effect as raising taxes, which itself is also being mentioned in greater frequency. If you are becoming bearish on the notion of government spending, the economy takes a hit on that alone. Add to this the capital issues being faced by lending institutions and problems persist.

 

The correction will continue for some time, there will be slight rises here and there, but there is years more to go....

 

 

Everytime I think I got you figured out, you come up with a curveball.

 

If the government doesn't spend, your argument is less money being spent in the economy, correct?

The flip-side of that coin is that if .gov isn't spending it, then the consumer has more money left in his pocket.

More money means he can spend it (consume) on what he wishes, and not run it through the red-tape machine of Uncle Sugar.

 

It's the same argument we are hearing in MN regarding the VIkings right now.

If they leave, it will destroy jobs because those people won't be spending money on Vikings related businesses.

It's a poor argument because those people can now spend that money on something else. New jobs will be created in other areas.

 

Now...maybe I'm missing your point...and if that's the case, an explanation would help.

 

That all being said.....this whole article......Really?

 

I've been saying this crap for years. The fundamentals are bad, bad, bad. And I don't care how much money the Fed gives Uncle Sugar to spend on whatever they wish, sooner or later you're going to realize we're a dying economy right now and some MAJOR changes need to happen to allow it to live and breathe. Those changes aren't going to happen because people aren't smart enough to elect the correct people (and there's not exactly a surplus of those either).

 

I'm chicken-little and I know it. I think about it probably daily.

It's all around you...every day. You just have to pay attention. Businesses are closing on every street you drive on.

Strip malls are bare. Banks are going bankrupt. Houses foreclosing everywhere and there's no end in site for that. I think even the naysayers know that.

This bubble is still deflating folks. We just tried to reinflate it a bit with .gov spending and 0% interest rates from the Fed. Think QE1,2 and soon to be 3...and then 4.

Businesses are doing what I'm doing. Sitting on as much money as they can. They are saving for a rainy day and if you're not smart enough to watch what the smart people are doing, and emulating it; then I think you're an idiot. But there's no shortage of those people either.

 

It's not about Obama. It's not about Democrat vs. Republican. It's about fiscal and monetary policy and neither are going to change.

 

Guys like Greedo are probably 3 times as smart/educated as I am. He's probably made a metric ton of money in the last 3 years because he knows how to play the game and because he understands the rules.

 

What I THINK he fails to understand is that the model the rules are based on is fundamentally flawed and is destined (at some point) to self-implode because PEOPLE cannot be trusted to do the right thing.

Going off the gold standard allowed the government to spend whatever it wants (deficits be damned) and that will not stop until there is no other choice because people won't vote for (and nobody will run on a platform of (Sans Ron Paul)) drastic cutting of entitlements and defense.

 

You see I don't care that most of you think I'm "loony" or "chicken little". I understand something that most of you don't or simply won't allow yourselves to admit.

And I'm not the only one. The smart people know too. There's a reason rich people, big businesses and even entire countries (see China) are paying down debt and investing in Gold and other real assets.

The writing is on the wall; all you have to do is stop and read it.

[Gepetto 989]

Greed, wastefulness, and supply and demand is the reason.

[LOD01 192]

http://www.cnbc.com/id/43236764

Yastrow said. "We’re on the verge of a great, great depression. The [Federal Reserve] knows it.

 

However, he said he wouldn’t sell stocks.

Translation: The ###### is going to hit the fan and I need you schmucks to by my stocks so i can get out.

[penultimatestraw 473]

Really.....huh, how about that, I wonder if anyone warned any of us, say four or five years ago that this was coming, and was laughed at or something....

Put me on the record that our economy will recover in the future. And crash again.

 

What I THINK he fails to understand is that the model the rules are based on is fundamentally flawed and is destined (at some point) to self-implode because PEOPLE cannot be trusted to do the right thing.

This is correct. No use worrying, but an individual can try to do the "right" thing and plan accordingly.

[IGotWorms 3,339]

The problem is that the people with the wealth are hoarding it instead of bolstering the economy through spending and investments. I know that will be hard for many of you to believe because it runs contrary to BS trickle-down economics, but that's the truth. The people at the top don't need the working class to make money and they don't give a fvck what that means for anyone else.

[Gepetto 989]

The problem is that the people with the wealth are hoarding it instead of bolstering the economy through spending and investments. I know that will be hard for many of you to believe because it runs contrary to BS trickle-down economics, but that's the truth. The people at the top don't need the working class to make money and they don't give a fvck what that means for anyone else.

[IGotWorms 3,339]

 

What an insightful response. I now see the error of my thinking.

[Gepetto 989]

What an insightful response. I now see the error of my thinking.

 

I wouldn't know where to start. I disagree with everything you said. I don't want to argue with you. Neither of us could prove or disprove any of what you just said, so why bother.

 

[BLS 313]

The problem is that the people with the wealth are hoarding it instead of bolstering the economy through spending and investments. I know that will be hard for many of you to believe because it runs contrary to BS trickle-down economics, but that's the truth. The people at the top don't need the working class to make money and they don't give a fvck what that means for anyone else.

 

 

What you say is true, but it is NOT the problem. It's the epitome of a recession. People with stuff hoard it, thus a recession.

SMART people are gonna hoard it until there's reason to believe the storm has passed.

 

The storm, most certainly has not passed. In fact, I believe the big storm is just over the horizon.

It will come, and sh1t will get bad, and then the sun will come back out and another day will happen just like has happened throughout time.

It's just that the time between the start of the storm and the end of the storm might just be a lot longer than people think.

[Gepetto 989]

The problem is that the people with the wealth are hoarding it instead of bolstering the economy through spending and investments. I know that will be hard for many of you to believe because it runs contrary to BS trickle-down economics, but that's the truth. The people at the top don't need the working class to make money and they don't give a fvck what that means for anyone else.

 

You should look up how many people hoard money in Japan. It's staggering. It's smart to save money. I think a lot of very wealthy people in the United States own businesses and provide employment to a great many people. They invest quite a bit of money as well and spend more than the middle class and of course save way more as well because they have so much more wealth. It's not the responsibility of the wealthy to spend or invest their money now in these economic times. They are smart to hoard it. If everyone else can't figure out how to save and get by then it's their own fault.

[IGotWorms 3,339]

You should look up how many people hoard money in Japan. It's staggering. It's smart to save money. I think a lot of very wealthy people in the United States own businesses and provide employment to a great many people. They invest quite a bit of money as well and spend more than the middle class and of course save way more as well because they have so much more wealth. It's not the responsibility of the wealthy to spend or invest their money now in these economic times. They are smart to hoard it. If everyone else can't figure out how to save and get by then it's their own fault.

 

So then how is the economy going to improve? If the people that have the wealth won't spend it on capital projects or hiring employees and so forth, how is the market going to get any better? At that point it looks like the only option is for the government to step in and drive the economy, which is exactly what everyone doesn't want.

[IGotWorms 3,339]

What you say is true, but it is NOT the problem. It's the epitome of a recession. People with stuff hoard it, thus a recession.

SMART people are gonna hoard it until there's reason to believe the storm has passed.

 

That makes sense, but how does the storm pass as long as the wealthy are hoarding all of their money? It's a catch 22

[Voltaire 4,569]

That makes sense, but how does the storm pass as long as the wealthy are hoarding all of their money? It's a catch 22

Not everybody is on the same page or following the same playbook and not every industry is growing/shrinking at the same time. If the opportunity presents itself, companies/individuals will invest- and they're always looking for a good opportunity.

[Strike 4,003]

So then how is the economy going to improve? If the people that have the wealth won't spend it on capital projects or hiring employees and so forth, how is the market going to get any better? At that point it looks like the only option is for the government to step in and drive the economy, which is exactly what everyone doesn't want.

 

If you want the economy to improve you should quit supporting the Messiah and all the anti business policies he's creating. You don't get it. They keep creating more onerous policies, which hurt the economy, and then they tell us they have to bail us out by creating even more onerous policies. And the cycle goes on and on, and people such as yourself eat it up.

[Voltaire 4,569]

If you want the economy to improve you should quit supporting the Messiah and all the anti business policies he's creating. You don't get it. They keep creating more onerous policies, which hurt the economy, and then they tell us they have to bail us out by creating even more onerous policies. And the cycle goes on and on, and people such as yourself eat it up.

 

I'm curious what you think some of his worse policies have been. Then I can check to see which ones I agree and disagree with.

[IGotWorms 3,339]

If you want the economy to improve you should quit supporting the Messiah and all the anti business policies he's creating. You don't get it. They keep creating more onerous policies, which hurt the economy, and then they tell us they have to bail us out by creating even more onerous policies. And the cycle goes on and on, and people such as yourself eat it up.

 

Whoa buddy, I think you are off the mark there. Do you remember what caused the economic crash of 2008, or is that already too long ago for you to remember? Seems to me a little more regulation would have avoided a lot of that pain.

[IMMensaMind 460]

Looks like you're right. "is drying up" would be more accurate.

 

The economy had been propped up with some Keynesian deficit spending which is coming to an end. When that $168 billion runs out, the chance of seeing any more stimulus money is: zero.

 

Meanwhile politicians are dillydallying. Who knows how serious the politicnas are about this game of chicken with the debt limit. Irresponsible people who really don't give a fock if we default exist on both the right (IMMensaMind) and left http://apps.detnews.com/apps/blogs/politicsblog/index.php?blogid=17383 and they make me nervous. Who knows if/when the bond markets will freak. Could happen at any time.

 

Careful throwing insults, fruitcup: the debt ceiling not being expanded is a good idea. We will not default, but we will be forced to grow the fock up and drastically limit this bullsh!t sugar rush spending spree that Government has focked us with.

 

You have no answer for the worry that raising the debt ceiling will merely result in facing a greater degree of the same problem next year, because this Government has shown no indication whatsoever that it can cut itself off.

[IMMensaMind 460]

The problem is that the people with the wealth are hoarding it instead of bolstering the economy through spending and investments. I know that will be hard for many of you to believe because it runs contrary to BS trickle-down economics, but that's the truth.

 

Contrary to trickle down? You just proved the validity of trickle down! If those on the top do not spend and invest, the rest of the country is FOCKED.

 

WTF better definition of trickle down could you possibly want? You just admitted that the top tier sitting on cash is the problem.

 

So why are they sitting on cash? Because they're not confident in the policies emanating from Washington, that's why. They're worried that any investment they make won't be allowed to return to them a profit; they're worried about onerous regulation climate and an Administration more than willing to regulate them out of business; they're worried about Obamacare, etc.

 

This isn't hard to understand.

 

The people at the top don't need the working class to make money and they don't give a fvck what that means for anyone else.

 

That's utter fantasy. The wealthy need the productivity of the working class to make them money. If that isn't obvious to you, you're full scale deluded by whatever leftwing propaganda rag has you rapt attention. What the wealthy do not want to do, however, is put their personal capital and names on the line when the uncertainty is far too great, and the Government is engaging in blatantly anti-business policy.

 

That's why we're not going anywhere, and the amount of debt this Administration has created as a burden on our society is absolutely staggering.

[Strike 4,003]

I'm curious what you think some of his worse policies have been. Then I can check to see which ones I agree and disagree with.

 

He's pretty much halted oil leases since the Gulf disaster. This has not only probably had an effect on the price of oil but is costing us thousands of jobs. Job creation should be a priority right now, not his agenda to force us off of oil.

 

His health care overhaul - This thing fails on so many levels. But the requirements for business aren't good. And since no one knows the exact ramifications of those requirements since many haven't been rolled out yet, not to mention the hundreds or thousands of exemptions he's given, many businesses are taking a wait and see approach. They don't want to hire a bunch of people and then find out they have to spend an extra 10k per employee on health insurance.

 

There are probably others that I'm forgetting right now. BLS or RLLD can probably add to this. And much of it is just his anti business rhetoric. He's constantly vilifying businesses as the cause of many of our problems. First, it was the banks for not loaning anything. Then it was Wall Street. Then the Oil Companies. Well, businesses have taken note and are waiting to see what policies are enacted before starting major expansions. They don't want to start spending money and then have Obama decide all businesses have to buy their workers a house.

[Strike 4,003]

Whoa buddy, I think you are off the mark there. Do you remember what caused the economic crash of 2008, or is that already too long ago for you to remember? Seems to me a little more regulation would have avoided a lot of that pain.

 

That's the problem with people like you. You think I'm advocating for a wild west business environment. I'm not. Some regulation is necessary. But they've done very little to address the issues that caused this crash. If they REALLY wanted to address the issue they'd reinstate the Glass-Steagall Act. But they haven't and they won't. Adding more regulations that aren't good regulations isn't the answer. But, as I said, people like you just soak all their B.S. in.

[BLS 313]

Contrary to trickle down? You just proved the validity of trickle down! If those on the top do not spend and invest, the rest of the country is FOCKED.

 

WTF better definition of trickle down could you possibly want? You just admitted that the top tier sitting on cash is the problem.

 

So why are they sitting on cash? Because they're not confident in the policies emanating from Washington, that's why. They're worried that any investment they make won't be allowed to return to them a profit; they're worried about onerous regulation climate and an Administration more than willing to regulate them out of business; they're worried about Obamacare, etc.

 

This isn't hard to understand.

 

 

 

That's utter fantasy. The wealthy need the productivity of the working class to make them money. If that isn't obvious to you, you're full scale deluded by whatever leftwing propaganda rag has you rapt attention. What the wealthy do not want to do, however, is put their personal capital and names on the line when the uncertainty is far too great, and the Government is engaging in blatantly anti-business policy.

 

That's why we're not going anywhere, and the amount of debt this Administration has created as a burden on our society is absolutely staggering.

 

 

More flies with honey than vinegar buddy. He's willing to listen to why it's not working.

You're not helping our viewpoint by belittling him in the process.

[Voltaire 4,569]

He's pretty much halted oil leases since the Gulf disaster. This has not only probably had an effect on the price of oil but is costing us thousands of jobs. Job creation should be a priority right now, not his agenda to force us off of oil.

 

His health care overhaul - This thing fails on so many levels. But the requirements for business aren't good. And since no one knows the exact ramifications of those requirements since many haven't been rolled out yet, not to mention the hundreds or thousands of exemptions he's given, many businesses are taking a wait and see approach. They don't want to hire a bunch of people and then find out they have to spend an extra 10k per employee on health insurance.

 

There are probably others that I'm forgetting right now. BLS or RLLD can probably add to this. And much of it is just his anti business rhetoric. He's constantly vilifying businesses as the cause of many of our problems. First, it was the banks for not loaning anything. Then it was Wall Street. Then the Oil Companies. Well, businesses have taken note and are waiting to see what policies are enacted before starting major expansions. They don't want to start spending money and then have Obama decide all businesses have to buy their workers a house.

I'm glad that banking regulations and especially Elizabeth Warren aren't on the list. Sometimes the Dems obsession with fighting for the little people or environment goes overboard but sometimes not. I think the banking oversight that she advocates is very positive and something that I can only expect to get from the Dems.

 

Obama's interior secretary is about the most moderate that any conservative could hope for. He ad extended the deep sea drilling rights just a few months before the oil leak and took a lot of flack from the environmental groups on his left over this. When the spill happened the environmental groups went berzerk. I think this is about the best that can be expected from any Dem.

 

Health Care overhaul, I'll agree with you. Maybe not totally. There are parts of it that I find worthwhile. Preventing insurance companies from dropping coverage when people get very sick/expensive being the best.

[Voltaire 4,569]

Careful throwing insults, fruitcup: the debt ceiling not being expanded is a good idea. We will not default, but we will be forced to grow the fock up and drastically limit this bullsh!t sugar rush spending spree that Government has focked us with.

 

You have no answer for the worry that raising the debt ceiling will merely result in facing a greater degree of the same problem next year, because this Government has shown no indication whatsoever that it can cut itself off.

 

The currency is only backed by the goodwill and faith of the US government. The debt ceiling is not something you fock with. Listening to you cheer the driving of the country off the cliff makes me apoplectic.

 

There are better times to push for spending limits. Earlier when the debate was government shutdown- well in truth, I didn't want that to happen either- but I was ready to roll with it because I knew it wouldn't be economic armageddon. That was a moderatly decent time.

 

The very, very best time to fight for spending cuts is before the money is appropriated, not after. What you say is "I'm not going to buy a new TV this year." What you don't say is "I'm not going to pay for the fridge I bought in December."