Obama Defies Pessimists as Rising Economy Converges With Stocks

[swag]

Source: Bloomberg

March 10 (Bloomberg) -- The political consensus may be that President Barack Obama’s handling of the economy has been weak. The judgment of money in all its forms has been overwhelmingly positive, and that may be the more lasting appraisal.

One year after U.S stocks hit their post-financial-crisis low on March 9, 2009, the benchmark Standard & Poor’s 500 Index has risen more than 68 percent, and it’s up more than 41 percent since Obama took office. Credit spreads have narrowed. Commodity prices have surged. Housing prices have stabilized.

“We’ve had a phenomenal run in asset classes across the board,” said Dan Greenhaus, chief economic strategist for Miller Tabak & Co. in New York. “If he was a Republican, we would hear a never-ending drumbeat of news stories about markets voting in favor of the president.”

The economy has also strengthened beyond expectations at the time Obama took office. The gross domestic product grew at a 5.9 percent annual pace in the fourth quarter, compared with a median forecast of 2.0 percent in a Bloomberg survey of economists a week before Obama’s Jan. 20, 2009, inauguration. The median forecast for GDP growth this year is 3.0 percent, according to Bloomberg’s February survey of economists, versus 2.1 percent for 2010 in the survey taken 13 months earlier.

“You have to give them -- along with the Federal Reserve - - a lot of credit,” said Joseph Carson, director of economic research at AllianceBernstein LP in New York. “A year ago, there was panic, as well as concern. And a lot of the expectations were not only that we were going to have declines in activity but they would stretch all the way to 2010, if not 2011.”


Read more: http://www.bloomberg.com/apps/news?pid=20601109&sid=aeSenIUvpSK0&pos=10

[AllentownJake]

1. False recovery

The banking system is still broke and the government is the economy.

They moved private debts onto the public books and even still, the banking system has no ability to lend.

GDP is the only income statement I know where spent borrowed money is counted in income.

You borrow and spend 2 trillion more than you tax, you will have GDP growth. The hangover is going to be a real bad one for this. Take out the government spending, you have a depression in GDP. Another 11 trillion in Federal Reserve action as well, that stops in a month.

The question next is does the private sector (you gotta tax someone to pay back that 2 trillion) take over for the government now, and with the banking system in the shape it is in...I doubt it.

[terrell9584]

5. Tell that to the 20% (not 10) of Americans who are out of work

The only people saying the economy is getting better is the government. I don't give a fuck what the Dow Jones says. I do care what the Doug Jones says and right now the Doug Jones is getting worse.

[Luciferous]

42. Yep. I graduated last year and haven't been able to find a job, but

people like me don't count in the unemployment rate. I also know a lot of people that are underemployed that don't count either. The company my husband works for is down to about 60 people- down from almost 300 in 2007. Half of those people are having their hours cut in half starting next week. The government is simply trying to spin things so that they will look good come November. It's total bullshit.

[yava]

51. Luciferous, I agree. This recovery is not for people. The quote says...

"The judgment of money in all its forms has been overwhelmingly positive, and that may be the more lasting appraisal."
It basically says Wall street is happy. Well....

[DCBob]

8. I will take this "false recovery" over a "real depression"...

Or is a real depression what some of you naysayers actually want?

[AllentownJake]

9. You are going to get one anyway

A broke banking system, broke states, and the federal government with less ammo to fight.

You are inflating a tire with a hole in it.

QE stops in April, and we can't keep borrowing 1.4 trillion a year to try to make things work at the federal level.

[DCBob]

11. Maybe but at least we now have fighting chance...

The "false recovery", as you put it, buys us some time to let the economy heal itself... consumer and business optimism is now growing which will result more jobs, more tax receipts, more options for the Government and possibly a "real recovery", even in your eyes.

[AllentownJake]

12. You really didn't read what I just wrote did you

If what we had, was a typical inventory recession what you would say was true. We had a credit contraction and deflationary debt crisis.

The banking system collapsing is what caused this mess to happen. The system is still broken and still insolvent.

You can have all the optimism you want, that optimism eventually hits the wall of no place to fund the optimism. Federal Government can't keep borrowing to lend at this pace for more than another 3 months without taking a hit on the interest they pay. Once that happens, they have to stop borrowing as much.

A recession, cleans out the weak players, allows for new players to come in, and creates growth through change.

A depression is a systematic failure. They may have avoided the GDP definition by borrowing 2 trillion over receipts in 18 months and by borrowing another trillion this year. However, not fixing the systemic problem, no going anywhere.

I heard they are looking at Public Pension funds right now to fund banking...that sounds like a story that is going to end well.

[DCBob]

17. I read it, I dont agree with it. Your taking the worst case scenario.

It might happen that way but I think there are now options to avoid it. I dont think we will ever get back to the booming economy of the late 90's but I think we can muddle along and keep the lights on and food on the table for most folks.

[AllentownJake]

19. What are the "options"

Broke banking system.

State budget cuts

Federal Budget that cannot be maintained and must shrink.

Where do you see growth.

The only thing this administration did, was kick the can of pain and not fix any systemic problems.

How does that story end.

[DCBob]

24. If we can stop the slide and begin to grow the economy again, even if just slowly..

the treasury will have more resources/options to continue to prop up the economy and financial systems until the recovery becomes "real". Maybe that is too simplistic and optimistic but that's how I feel.

[AllentownJake]

26. Bank assets are overvalued by about 20%

3% GDP growth without a major recession for 7 years :rofl: that means in 2017 you can have a return to historical values. Well that without factoring in foreclosures which make an asset worth zero

BTW how is that trend going?

The guy needed to be an FDR, he was a Hoover. Major Banking crisis within 2 years.

[icee]

33. Everything you say is true. We are looking at an unmitigated

disaster ahead, where the system is not only broken, but 43% of the retiring population has less than 10,000.00 saved for retirement. We are now playing "let's pretend". It's basically ovah.

[AllentownJake]

34. I have no problem with disagreeing with my position

But please, don't use illogical happy thoughts.

We were minutes away from final victory in Afghanistan and Iraq for 8 and 7 years respectively now.

Not directed at you but to others who feel like jumping in.

[icee]

37. Iraq was the US's Parthia. I'm to the point where I simply want

to know whether we are headed for rampant deflation or inflation. I am leaning toward deflation. Basically, at this point, a good per cent of the population will have to be eradicated for the rest to survive. The only way that can be postponed is to halve military spending.

[AllentownJake]

39. You can have both depending on the response

Kind of like a Tidal wave.

The water all recedes and than comes rushing in. You have inflation it is over. CDS bombs go off.

[icee]

41. That's what I think too. Something very out of whack in markets.

[AllentownJake]

46. Well Mutual Funds are all in on equities

That is the dumb money generally.

[Iowa]

47. This isn't correct...

43% of the retiring population has less than 10,000.00 saved for retirement

It wasn't 43% of the "retiring population". The 43% figure was based upon a survey by the Employee Benefit Research Institute of 1,153 US workers and retirees age 25 and older. Big difference.

That said, I tend to agree that the situation is grim long-term.

[icee]

52. Sorry, Iowa. Apparently, I'm going to have to quit thinking my mind

is a tape recorder for URLS. As more and more stress mounts every day for so many things, I am finding I am starting to forget things.

[terrell9584]

15. We're in a real depression

The media just hasn't told you yet.



You know Hoover was still claiming recovery was around the corner in mid 1931. Something to think about.

[DCBob]

18. Doesnt look like one from my area...

I know DC is different from the rest of country but we are nearly back to full employment here... shops are busy and traffic jams are back too, yuk.

[AllentownJake]

20. I would expect that D.C.

Would feel the recovery the best.

:rofl:

[Luciferous]

43. I'm shocked that DC doesn't have a big unemployment problem

:eyes:

[SkyDaddy7]

21. Thank-you!

I am baffled at what many here are saying...I think it is because most simply have no idea just how bad things were when Obama took office! Let us be honest Obama is not a god! He can't produce votes for policies that the votes do not exist and he can't snap his fingers and make the economy like it was in the 90's.

FDR did not turn everything around in one year!

[AllentownJake]

28. I know how bad things were

FDR didn't run around the country talking about Social Security in year one.

Broke banking system, he wants to talk about Health Insurance? Health Insurance?

[DCBob]

30. I think many dont want a recovery. I think they want this country to collapse...

in some desperate twisted hope that what rises from the ashes will be some sort of liberal utopia. If this county does collapse it wont be pretty for liberals.. most likely the power will be in the hands of the wealthy, connected, and ruthless... even more that it is already.

[AllentownJake]

31. Oh please

You fail to address anything I said with any logic other than if we all clap Tinkerbell lives and now you engage in McCarthy type trite.

Believe, me I'm more than aware of what happens if things get worse.

I'm not a person that believes saying things makes them reality.

[pattmarty]

36. Now if that whole diatribe ain't a fucking RW talking point, then I ................

.........haven't been getting my nightly dose of Fox "news". I am going to be polite and say you are somewhat naive.

[QC]

38. The liberal utopians want to sap and impurify all of our precious bodily fluids. n/t

[Luciferous]

45. That's bullshit. Tell that to the people who can't find a job, who are

losing their homes and can't feed their families. Tell that to my husband's friend, who just got laid off and is getting 170 a week in unemployment- he has 3 kids to support. People don't want this, but acting like it's not happening isn't going to solve the problem.

[SkyDaddy7]

53. I agree! It won't be good for Liberals!!!

The worse things get in America the more religious we will get which means the more to the right we will go! There are already calls that we are in the shape we are in because we have moved away from GAWD!

[pattmarty]

35. At least after FDR's first year you could see his "balls".

:sarcasm:

[Happy Hippy]

44. Witty one liner.

Wasn't he in a wheelchair though? I doubt he could see his own balls.


I know, I know, that is an awful joke - just couldn't help it.

[pattmarty]

32. Then you must be one of the "haves" with a good job and an...................

............excellent portfolio. My kids are working class, and they ain't doing very well. I guess it's just "perception".

[MannyGoldstein]

2. Banker Bubble Reinflated Using $13+ Trillion in Tax Cash

Don't worry - this time there won't be a crash, chumps.

Regards,

Larry, Timmy, Rahm, & Barack

[swag]

6. You're right. Should have cut taxes instead.

[MannyGoldstein]

7. Yes, That Was The Only Other Option

False choice, obviously

[AllentownJake]

14. Well you know

If you think the President did the wrong thing, you are obviously in the camp of Rush Limbaugh.

You surely can't be looking back to the last guy who had this problem and what he did.

[AllentownJake]

13. Probably fixed the banking system instead of talking about Health Insurance nt.

[DCBob]

3. This is good news to everyone except the right-wing failmongers....

and ever-present naysayers on this board.

[HughMoran]

4. Uh-huh

^witness

[AllentownJake]

22. Green shoots version II

:rofl:

[HughMoran]

27. I find Obama's understated approach to the economic situation refreshing

As the author points out, if this was a Republican, everybody would be giving the President credit. Not only is the media not giving him any credit, Obama has been rather understated in his language about what looks 'good' to the outside world. He knows what you know - that this situation is far from over. Of course, unlike you, he's not going to talk it down either - that would be foolish.

[AllentownJake]

29. If a Republican was doing this

I'd be in the streets. He is getting a minor pass by political affiliation.

[fasttense]

10. Let's see how wonderful the economy is after 5 million people lose their

unemployment benefits this summer.

Five million people who have used up all their unemployment benefits but still can't find a job.

Five million more people with no income at all.

Five million more American citizens that just drop into a horrible poverty.

Five million more people who have dropped off the unemployment rolls.

[terrell9584]

16. and crime skyrockets this summer

And there will be nowhere near the law enforcement necessary to protect you. In areas like Michigan and California that are especially hard hit you're gonna see free fire zone. Neighborhoods that you thought were safe will no longer be safe. We no longer have the extended family networks and the like that sustained people in the 30s.


This will be worse than the 30s. Much worse.

[ipaint]

49. I'll let you know how it goes, I'm one of them.

And to the other poster relax, I don't intend to rob your houses and take your stuff.

[customerserviceguy]

23. Yes, the gamblers are showing paper profits

It's a little like looking at the pile of Monopoly money on my side of the card table, and concluding that I'm rich...

[Earth_First]

25. So the extremely wealthy folks figured out a way to reinvent the game?

I'm sure that there is something new and exciting that the extremely wealthy concocted and are back at the shell game creating numbers which assume that the economy is well on it's way again...

Sure, they are making money, but 19 million Americans are NOT!

[Steerpike]

40. Good Morning.

The rich get richer and the poor middle class squeezes by. Working class people who lost their jobs are losing their homes to uncaring banks. 65,000 visas to be issued to bring non citizens in to the U.S. to do skilled work while millions are out of work or underemployed. Working class people who started out with 4 to 6 per cent credit cards are now paying out the lions share of their spending money to 29 per cent credit cards. Wages have been stagnant for years and the price of living has gone up and up and up. Just when we think that all hope is lost we elect a Democratic majority to our government only to find that the we cannot allow the rich to fail. We cannot allow the poor to succeed, becouse we can't afford it. We can afford to spend billions to kill women and children in lands far away. Leonard Peltier is still behind bars. Citizens are jailed for Marijuana. The Patriot Act is still infringing on our rights to privacy and individual freedoms.

Yup...happy times are here again...

But never fear we still have a lot more time...

[ipaint]

48. The under/unemployment rate for those making under 25,000 a year is 30%.

Do they count? Or is it just the small minority of rich who by the way never experienced the recession, that get to declare it over.

[GeorgeGist]

50. Fooled again.

Shame on you.