|September 3, 2009|
From birdie to bogey and the meaning of life…
"Fly baby! Fly!" I pleaded as my well struck six-iron shot came up short of the green and buried itself in the bunker.
Why are investors so bullish?
Investor sentiment is usually a good reverse indicator. Data shows it gets more reliable the stronger the sentiment grows.
What's the real story?
That is exactly what most investors are hearing. And it's exactly what they want to hear.
So how is the redistribution of wealth working out?
Last week the preliminary figure for the 2nd quarter Gross Domestic Product was announced. Despite an increase in government spending by 5.6%, the GDP was negative 1%.
Despite the headwind, the consensus is that GDP will finally tick positive in the third quarter. But what happens when the circus leaves town and the tents are folded up?
The economic "recovery" so far has been propped up by massive government spending. But the circus may be over soon.
So what's the economy going to do when there is no more government money floating around creating a false sense of financial stability?
We double-dip, that's what we do.
Eventually the jig will be up and the so-called recovery will sputter. This will start a double-dip recession. Corporate earnings still suck and job growth is negative.
But that just means that the government will "double-dip" into its imaginary piggy bank and take out even more "payday loans" with your name on the dotted line.
A sell signal from God?
Unlike in golf, hindsight can help when it comes to investing.
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