Friday, October 29, 2010
Carl Bernstein: I know.. I thought all the Watergate lies were bad.
Bob Woodward: Yes but the difference was back then the lies came from the Gov't alone.
Carl Bernstein: Agreed: Now we the media are happy co-conspirators.
Bob Woodward: Hmm, think I'll stick to writing books on Presidents and wars.
If you read A&G with regularity, you find consistent annoyance with how the mainstream financial media and those who make a living in that field work together to distort truth for their own economic benefit. The media will write a story that is 'positive' yet bury the statistical reality eight paragraphs down, or will mention something negative, then add a bunch of quotes from 'experts' who cheerily turn that bad information into 'optimism'.
Stocks Waver as GDP Grows 2% in 3Q- "Stocks wavered Friday after a report on economic growth did little to reassure investors about the health of the economy. The Dow Jones industrial average rose 5 points in afternoon trading. Gross domestic product, the broadest measure of the nation's economy, grew at a 2 percent annual pace in the third quarter. That was in line with economists' expectations and only slightly better than the 1.7 percent growth rate during the second quarter... Normally such slow GDP growth would have driven stocks much lower. But signs of weak economic expansion provide further support for the Fed's anticipated stimulus plan." AP
1) 2% GDP growth is anemic. And considering that $13 Trillion (yes Trillion) has already been spent since early 2009 to get this economy moving, it is pathetic. To say it 'grew' implies Growth- an optimistic word used to describe something stagnant.
The concept of a Trillion is hard to grasp so let's put it this way- To use simple math, there are 300million Americans currently. If you took $13 Trillion ($13,000,000,000,000) and divided it evenly to each man, woman and child, each person would have received a personal stimulus of $43,333.33.
2) Its quite humorous that when stats are released into the public showing the economy struggling or doing poorly, the attitude of investors is a shrug and a 'so what- we'll turn it to our advantage'. Like pus filled boils and carbuncles on a face, the investors attach themselves onto Wall St, even with an paltry 2% GDP growth because to them, it is a 'positive' which they excitedly await like helpless baby birds being fed regurgitation from mommy bird.
* Funny how the Fed meets on November 3rd, the day After the midterm elections- definitely a coincidence I'm sure.
Remember what stimulus really is- free zero-interest money to banks to buy some of their toxic debts and which goes directly into the markets. This money is not lent out to businesses or individuals or used to create jobs. And without this guarantee of free money based on minimal economic growth, cowardly investors would have scurried and the market would have dropped by a hundred points. Which is alright- markets are supposed to ebb and flow when not artificially propped up by a government.
~ In summary, GDP is flat but this is 'good news' because "it was in line with economists' expectations" and not below, because it was slightly better than the flat 1.7% in 2Q and because it means Fed stimulus, which is a Horrible, disastrous thing, but is deceptively painted by the media as Great & necessary.
Posted by Susquehanna at Friday, October 29, 2010