Monday, April 13, 2009

Feel Good Manu-Factor

I am a glass half-empty kind of person. Even my friends call me a pessimist, but I prefer to be called a realist. Tell it like it is. Better out than in. This is why I can't quite drink the Kool-Aid and believe that this recession is over. I cannot see the 'green shoots' of recovery that the Dallas Fed and various media outlets are touting.
There are some pundits claiming that consumer spending figures, which amazingly were up last month, are 'massaged' by the government to get things moving again. (Nooooo! The government doesn't massage figures, does it?) The stock market is rallying, the S&P is up over 25% since its March 9th low, but the trading is coming purely from - well, traders. CNBC and other Kool-Aid vendors are saying it is time for the retail punters to get back in. Otherwise you will miss it!
Are people really that stupid? Are they so unwilling to admit that their over-spending habits might have had a teensy, weensy bit to do with our current mess? Do they truly have an unassailable belief that only profits can be made on their investments? If so then this financial crisis has taught them nothing. Moral hazard risk is not uniquely the domain of fatcat investment bankers.

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