RECOVERY IMMINENT, IT'S COMING SOON, IT'S ALMOST HERE, WE CAN SEE IT AROUND THE CORNER, MAYBE FIRST QUARTER 2010-HORSEPUCKY! DON'T DRINK THE COOL-AID!

It seems that every time the market makes a big move up, the forecasts immediately change to paint a rosy picture of the economy "just around the corner". Just who are these forecasters, these crystal ball readers?

Well it is clear that they are NOT business owners who are trying to make a go of their business. The 1,000 page Health Care bill that will do everything magical for us all, and nobody has yet read, alone is enough to kill any economic growth.

The morons in Washington, you know who they are collectively, the folks who have brought health care for Indian Reservations and the Veterans Hospitals and rebuilt New Orleans-yes those same folks, now are planning to charge an 8% fee to employers who do not offer a health care benefit to employees.

I got news for you, employers will figure out ways to NOT employ workers, since that 8% added cost of payroll is a staggering amount to a business.

Most businesses do not make 8% of their sales as profits. Most businesses, especially small businesses scrape by with the owner generally being the last to get paid when times are tough.

Here is just the basic cost of a worker's taxes that an employer now pays in addition to the salary: employer's portion of Social Security, Medicare, unemployment insurance federal, unemployment insurance state, workman's compensation, and depending on the city or state a variety of employee related taxes for the privilege of having employees.

Yesterday a blaring headline revealed that a high earner in New York City would be subject to at least a 57% combined tax rate, and that excludes any local real estate, and all the other add-on taxes for services and utilities and use of every type.

Why would someone want to live there....MOVE OUT NOW to a low tax state!

So to all those "predictors" of the economic miracle which is just around the corner, I would like to make a bet.....put all your savings of this bet against me. If the economy turns around during this administration, by 2012, you get all my money, and if it does not, I get all your money. How's that?

The course of action taken by the new administration is so insidious and destructive to the economy, there is little chance that any growth will take place between now and 2012, except in the ranks of bloated government agencies. The individual states will have the opposite results, as they have to present balanced budgets, They will not be able to balance them through hard choices, instead, they will raise taxes, which again will cause the vicious cycle of unemployment for the private workforce.

Does nobody see this coming?

STOCKBROKER ADVICE-HEED IT OR TRY GOING IT ALONE, THERE ARE LOTS OF " ADVISERS", OFTEN CONTRADICTING EACH OTHER-WHAT DO YOU DO NOW?

President Bush was described as confused, but not as confused as I am.
It was a strange day. When I asked my stockbroker what he was buying today, he said " CANNED GOODS, CANDLES AND AMMUNITION!"

Well with the market at this level, where will it go from here? Is there a market sector that will do well, that will out-perform the market?

There is little indication from the economic theories which state that:
1. The economy will recover and everything will be just great by the end of the year, or 2. The economy will collapse by the end of the year, or 3. The unsustainable deficit financing will collapse the dollar, or 3. The deficit is just fine and will not affect anything.

So, based on these totally contradictory theories each put out by people with lots of capital letters and periods after their name, we have no idea of what to do, do we?

Will the health sector do well due to the new government programs or will it do poorly as the government squeezes it for cost reductions?

Will the auto sector do well now that the government has committed some $100 billion to two auto companies, who have not earned that total during their combined 150 year in business?

Will industrial giants like GE or UNITED TECHNOLOGIES do well ?

Are all the ethanol plant owners now a good "buy" since they have bought out the bankrupt ones, on the cheap?

Do we buy coal companies or sell them?

Do we buy hotel chains or will the slower travel hurt them?

What about oil companies, buy or sell?

Housing, should we buy home builders or sell?

Gold, is it a buy or sell? Keep in mind that it was nearly this same price over 20 years ago.

Do we buy any of the commodities, the raw materials like copper?

Or do we just stay home, do not blow out any CO2, oops, got to breathe out though, and help the world with its "pollution" problems.

It is just so confusing. If we buy more products and spark the economy, we have to cause more CO2, but then again the administration tells us to not do that. It tells us on the other hand to go out and do it, do the spending, charge up our credit cards, then telling us NOT to change up our credit cards and live withing our means.

As usual, getting some help from the government gets you nowhere, it is just as confused as we are.

If this is not confusing, try reading the new CAP and TRADE bill.

GOVERNMENT NOW REVISED ITS FORECAST FOR THE ECONOMY-DOWNWARD AGAIN, BUT IS IT FAR ENOUGH? ARE THEIR FORECASTS RELIABLE, OR JUST CRYSTAL BALL?

The crystal ball came out again with the government "futurists" and crystal ball readers forecasting and predicting more gloom for the economy. I would be willing to pay actual money to see the raw data that they use to predict future events like "...and then in the fourth month after the Thanksgiving holiday...the economy will mysteriously turn up...maybe."

I wonder is these predictions come to these futurists in their dreams, sort of like that Tom Cruise movie where these people can see future events in their dreams and thoughts.

I too want to be a futurist, but my notes are based on common sense, not dreams.

Predicting economic future events is really not that difficult if one just looks around and pays attention to what is happening and likely to happen based on government policies as planned for the country.

Here is my short list of notes to then be used to predict future events:

1. TAXES WILL INCREASE ON JOB PROVIDERS PERSONALLY.
2. TAXES ON EVERY INDUSTRY AND BUSINESS THAT EMITS CO2 WILL IMPACT EVERYONE, SINCE WE ALSO EXHALE CO2, as does every animal we grow for food.
3. PROVIDERS OF EVERY UTILITY WILL PAY MORE UNDER THE NUTTY CAP AND TRADE TAX, AND THUS PASS THAT TO EVERY CONSUMER.
4. GOVERNMENT MANDATES OF EVERY TYPE will increase taxes, pass-thru fees and charges.
5. THE DOLLAR WILL BE WORTH LESS AND LESS, THUS ALL GOODS WILL COST MORE AND MORE ESPECIALLY IMPORTS FROM CHINA AND OIL IMPORTS FROM OTHER COUNTRIES.
6. AS INDUSTRIAL COMPANIES DO WORSE, THEIR WEAK PERFORMANCE WILL IMPACT THE STOCK MARKET AGAIN, AS VALUES DECLINE.
7. HIRING NEW WORKERS WILL BE TOTALLY STIFLED WITH THE CARD CHECK BILL, SINCE EVERY EMPLOYER WILL BE SUBJECT TO BECOMING UNIONIZED AND THUS WILL NOT HIRE MORE PEOPLE.
8. MANDATORY HEALTH CARE TO COVER PEOPLE THAT DO NOT WANT COVERAGE WILL ADD A SIGNIFICANT BURDEN FOR EMPLOYERS, WHO WILL NOT HIRE MORE PEOPLE.
9. BANK LENDING IS RESTRICTED TO BETTER CREDIT WORTHY CUSTOMERS, CUTTING OFF OR DIMINISHING CREDIT TO 95% OF BUSINESSES (no credit, no expansion).
10. NEW CREDIT CARD RESTRICTIONS WILL CAUSE LESS CREDIT TO BE AVAILABLE AND WILL LIMIT SMALL BUSINESS GROWTH.
11. LACK OF A VARIETY OF FINANCING FOR HOME PURCHASES AND BUILDING WILL KEEP THAT INDUSTRY WEAK.
12. FORCING CAR MAKERS TO MAKE CARS NOBODY WANTS (small, stupid looking and unsafe), WILL NOT REVIVE THE AUTO INDUSTRY.
13. RETAIL SALES ARE FALLING DUE TO LACK OF CREDIT BY CONSUMERS WHOSE CREDIT LINES ARE TAPPED OUT FOR THINGS LIKE FOOD PURCHASES ON THEIR CREDIT CARDS.
14. INDIVIDUAL STATES ARE RAISING TAXES ON THEIR RESIDENTS IN EVERY CONCEIVABLE CATEGORY, AND ADDING LOTTERY GAMES AND CASINOS, TO FURTHER EMPY OUT THE POCKEST OF THEIR RESIDENTS.

ETC.,ETC., ETC.,ETC............

So, I then take these short notes and overlay them into the future few months and years to predict the future.

So, based on these notes I predict that by the end of the year the entire economy will just wake up with a jolt, and start a fantastic growth spurt...NOT!!!!!

How can the government make a prediction of economic growth when they obviously have some note cards similar to mine?

There is only one explanation....mind control from Washington..."you will see a recovery...this is good news...it will improve...now repeat again...this is good it is improving..."

There may be green shoots appearing for the economy, but to much of the Federal Reserve they appeared to be light green. Central bank officials in recent months grew more pessimistic about their prospects for the economy, expecting a worse 2009 and 2010 than they forecast in January.

The projections, provided for the April 28-29 Federal Open Market Committee meeting, show central bankers getting closer to private economists’ expectations for the unemployment rate. The central tendency of the forecasts (excluding the three highest and three lowest among 17 policymakers) puts the unemployment rate at between 9.2% and 9.6% in the fourth quarter, down from the earlier projection of 8.5% to 8.8% made in January. The fourth-quarter 2010 forecast worsened to 9% to 9.5%, compared with a projection of 8% to 8.3% submitted in January. Even the 2011 forecast went up a full percentage point to between 7.7% and 8.5% in the fourth quarter of that year.

Fed officials still expect a recovery in sales and production to begin in the second half of this year, but the forces weighing on the economy were “likely to abate only slowly,” a summary released with the minutes said. Gross domestic product was projected to decline by 1.3% to 2% in the fourth quarter of 2009 from the year-earlier period, worse than the January projection of a decline between 0.5% and 1.3%. The forecast for 2010 was also downgraded a bit: the central tendency projection is now 2% to 3% growth, down from the January forecast of 2.5% to 3.3% for 2010.

The Fed said officials expected that “recoveries in consumer spending and residential investment initially would be damped by further deterioration in labor markets, still-tight credit conditions, and a continuing, if less pronounced, decline in house prices. Moreover, they anticipated that very low capacity utilization, sluggish growth in sales, and the high cost and limited availability of financing would contribute to further weakness in business fixed investment this year.”

Projections for growth in 2011, while downgraded, remained strong with output between 3.5% and 4.8% in the fourth quarter compared with a year earlier. But the Fed said most officials believe the economy would take five or six years to return to what they consider sustainable paths for growth, unemployment and inflation.

UPDATE: The Fed’s minutes, however, also noted that the Fed staff “revised up its outlook for economic activity in response to recent favorable financial developments as well as better-than-expected readings on final sales.” As is the Fed custom, the minutes didn’t include the specific numbers. “The staff’s projections for economic activity in the second half of 2009 and in 2010 were revised up, with real GDP expected to edge higher in the second half and then increase moderately next year.” The staff economists cited “the boost to spending from fiscal stimulus, the bottoming out of the housing market, a turn in the inventory cycle from liquidation to modest accumulation, and ongoing gradual recovery of financial markets.”

But the staff forecast shows the unemployment rate rising rise through the beginning of 2010 before edging down over the rest of that year while overall. Estimates for inflation over the next two years, measured by the personal consumption expenditures (PCE) inflation, the Fed’s favorite gauge, were revised up “slightly.”

Looking to 2011, the staff anticipated that financial markets and institutions would continue to recuperate, monetary policy would remain stimulative, fiscal stimulus would be fading, and inflation expectations would be relatively well anchored, the minutes said. Under those conditions, the staff projected that real GDP would expand fast enough to bring the unemployment rate down significantly.

What? How will that happen if personal consumption is being criticized by the President himself. His speech at Notre Dame's commencement chastised conspicuous consumption, and his criticism of traveler's going to Las Vegas is responsible for a significant slow-down in tourism visits to that town.

Furthermore, government moves at all levels are forcing less consumer spending, and instead have increased FEDERAL spending to unsustainable levels.

How again is all this going to result in a surge and growth in our economy?