Expectations

Ok, could someone explain why expectations should be anything but dismal?  As in previous blogs I tend to list things.
  1. We should be creating 150,000 jobs a month and the last three months we have produced outright job losses.
  2. Consumers are tapped and leveraged.  No more home equity loans, credit cards are maxed and late on payments, and they have begun dipping into the 401K to maintain spending.
  3. Fuel and food is at record costs and shipping costs does not appear to get cheaper anytime soon.
  4. There is little confidence as to the value of assets, counter-parties, credit agencies.
  5. The Fed, Treasury and other Government entities have taken actions not seen since the Great Depression, just how bad is it?
  6. Inflation expectations are going up, and up and up and the dollar is going down and down and down.  Did I mention food, gas and heating and cooling?
With this background, just how robust do you think a CEO's expectations are going to be?  People are betting on the rate cuts and $300 per taxpayer is going to fix the structural problems of our economy in the next six months.  I have said this before, (More Steroids Please, and In honor of Roger Clemens) we are deleveraging our economy, at the investment level (hedge funds); corporations, and consumers.  As we deleverage, the economy is going to contract. 

For any really smart person out there, if total debt decreases 20 percent how many points are shaved off GDP?

Posted by Bradley Fluetsch at 4/4/2008 5:05 AM
Categories: Economics
 

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