Friday, September 4, 2009

Commodity Shuffle

A nice three day weekend is practically here, volatility is dropping, equities are rising and bond yields are up. Labor day weekend is going to be a little less laborful, because today the market digested a 9.7% unemployment. Economist believe that the unemployment rate will continue to rise into next year topping out at about 10%. Now I am by no means an economist, but I would feel that this is a very bad thing. Now consumer spending counts for two thirds of our GDP, and with less working there will be more savings. Consumers will not spend there hard earned dollars like the burning holes we once were. GDP will in my opinion look so bad in the future that the dreams of hope and recovery will be crushed by false realities. I don't think that the market can just digest this situation and say "Well it will get better this is what was expected". And the only way it will get better is by more government stimulus. The economy is taking aspirin for a hole in the head. Now I believe in this country, I am not a doom and gloom believer, its just the reality of the situation is a lot worse then the market believes it is.

No comments:

Post a Comment