Wednesday, July 6, 2011
This week officially marks the official start of the July doldrums, the period of time where very little of significance occurs in the global economy.
Oh you will hear and read constant coverage of the US debt ceiling debate. This political party threatens to do this.. that party will walk out if not for that.. A big charade; a complete time waster to follow. Time will tick tick and get ever closer to the impending deadline to raise the debt ceiling. And it will look really bad in the final 72hours, and then.. Alas it will get done. By compromise, by crook or other canard- it will get done. It always does. And both parties will claim 'victory' and try to mold it into a 2012 election rallying point. Yawnnn...
And you will hear about how the euro is still in danger because S&P along with Moody's is not going to allow the criminal "troika" of the ECB, EU and IMF to just 'cleverly' rollover Greek debt into a convenient 30yr plan in order to protect the cockroach investors from taking losses. Or how Portugal's finances are in such bad shape that just three months (yes, Three!) after receiving a bailout, it looks very much like it will need a 2nd one. And of course you will hear about Spain's astronomically high unemployment rate and Italy's banks' credit ratings being downgraded.. Etc.
But of course the troika will come up with some cleverly insipid (and by rights Illegal) trick or scheme to get what it wants. And the can will be continually kicked down the proverbial road so that the elected officials of these nations, particularly Germany and France will get re-elected. So really nothing to worry about with Europe-- Evil politicians and Evil bankers with Evil souls will concoct Evil plans to protect Evil investors at the expense of hard-working taxpayers all over the European Union.
And back to America- QE2 is over.. so the stock market will go down.. or maybe up.. it doesn't matter ultimately. Its detached from Main Street. Its not playing with real money. Mom & Pop investor is smartly on the sidelines. CEOs aren't even investing their own personal wealth into their own companies, much less the market on the whole. So the Dow will probably go up 200pts one day and down 225 the next. And there will always be a rationalization. And all the while, the talking meat sticks on financial news will chant in unison, "Buy!" "Invest!", much like a kool-aid ingesting cult.
And expect bad housing and employment statistics to be treated as 'good' news due to intentionally and unrealistically low expectations modified by economists and others to create illusions of positive figures. And expect the mainstream media to gobble it up like a hot fudge sundae with jimmies, then regurgitate the "positive" growth to the populace who've fooled one too many times and don't believe the hype. And expect more news columns pretending to acknowledge and empathize that the nation is still in a recession, while Still using words like 'recovery' and 'soft patch' often within the articles' copy.
Other than a natural disaster or some other calamity that is unforeseen, expect July to be a most dull month on the economic news front, though we at A&G will try to make the non-events as entertaining and informative as possible.
Posted by Susquehanna at Wednesday, July 06, 2011