One More Sign of Recovery

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Risk is a four-letter word and a four-letter word.

While Merriam-Webster defines risk as the "possibility of loss or injury," the word has taken on the same meaning as a gaggle of other four-letter words that I can't reprint here. The reason is obvious -- investors all over the world took on risk in the run-up of the credit bubble, not really understanding what they were signing up for, and the results have been disastrous.

The Federal Reserve and the U.S. Treasury, though, have been fighting hard against the consequences of failed risk by throwing money at the financial system. And at least right now, that seems to be paying off.

The Treasury turnabout
According to Bloomberg, primary dealers with the Treasury had a short position in Treasuries of $10.5 billion last month. That may sound like some sort of foreign lingo, but it's important. You see, primary dealers typically make bets against Treasuries, as a hedge on riskier bets such as those on corporate or mortgage bonds. So the existence of a net short position suggests that financial companies such as Goldman Sachs (NYSE: GS  ) , JPMorgan Chase (NYSE: JPM  ) , and Bank of America (NYSE: BAC  ) are once again making loans of all types.

Though the measure rose back to a net long position of $16.2 billion at the end of last week, that's still well below the record level of $93.6 billion in June. And hey, in this environment, we'll take what we can get, right?

Corporate spread -- the difference between corporate bond yields and Treasury yields -- has also been narrowing, and was at 3.82% last week after peaking at more than 8% in March. Other measures of lending spreads show similar trends. And all of this reinforces the idea that investors are loosening up a bit after the panic of last year.

Back to Kansas?
But don't get too excited there, Dorothy. The question that faces us now that we're creeping back to "normal" is, what does normal actually mean. If you ask PIMCO's Bill Gross, you get a sobering account that the "normal" to which we're returning is a "new normal." Deleveraging, deglobalization, and regulation will mean that economic growth, profit growth, and stock market growth won't look anything like what we're used to in recent history.

Gross contends that the demons that still haunt us -- represented by companies like AIG (NYSE: AIG  ) and Fannie Mae (NYSE: FNM  ) , but actually widespread throughout the U.S. economy -- will keep a surging recovery and a quick-step economic growth rate under wraps. He also notes that the U.S. is reaping the whirlwind of moving away from being an economy that made things, toward one that instead relied on printed money and asset values.

A Grossian economic scenario would mean that investors betting on a healthy recovery for companies like Home Depot (NYSE: HD  ) and Target (NYSE: TGT  ) could be in for a reality check.

Most economists seem to be singing a similar tune; a Bloomberg survey of economists showed the average estimate for next year's growth to be 2.3%. It would seem that they also see dark clouds spoiling any stock market picnic in the near future.

Economists versus analysts
But not everyone is on the same page as Gross.

In more Bloomberg research, the average Wall Street analyst estimate for the S&P 500's profit growth in 2010 was a whopping 25%. In stark contrast to the dour predictions of Gross and economists, that would suggest that the S&P's price today is still cheap. It would appear that one of these groups is off the mark here. The historical relationship between profit growth and economic growth would suggest a GDP jump of 4.1% to support that heady 25% number.

This Fool is siding with the economists. I expect that the coming years will provide positive movement, but make our economy look more like the tortoise than the hare. But what do you think? Take the poll below to log your opinion on where the economy is headed. Then scroll down and fill up the comments section with your explanations.

The Home Depot is a Motley Fool Inside Value recommendation. Try any of our Foolish newsletters today, free for 30 days

Fool contributor Matt Koppenheffer owns shares of Bank of America, but does not own shares of any of the other companies mentioned. You can check out what Matt is keeping an eye on by visiting his CAPS portfolio, or you can follow Matt on Twitter @KoppTheFool. The Fool's disclosure policy has never once been caught with its pants down. Of course, it doesn't actually wear pants...

Read/Post Comments (29) | Recommend This Article (43)

Comments from our Foolish Readers

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  • Report this Comment On September 08, 2009, at 2:12 PM, plange01 wrote:

    recovery? have we entered dreamworld? the US is in a depression with over 20% of the workforce already unemployed..there is no recovery not a this point the only thing to watch is jobs.unless we see some real positive signs there soon its going to be game over for the US.the country is in far worse trouble now than it was a year ago...

  • Report this Comment On September 08, 2009, at 3:35 PM, paitencethinning wrote:

    I really have my doubts that we have turned the corner. Where are the jobs that Obama said would come with spending our money. Did we get duped into believing that we could buy our way out of this one or was the money really used to buy the big boys out of theirs. And why is Ms Bush now praising Obama did her friends get theirs. What a wacky government

  • Report this Comment On September 08, 2009, at 4:33 PM, LessGovernment wrote:

    Recovery? Yeah right.

    Nearly 10 % unemployment - nearly 20 % if you count those with part time work that want full time work and those that are under employed just trying to get by.

    We are in the process of losing our automotive business.

    We have 12 trillion currently in national debt up from 9 trillion in 2007 and going to 21 trillion in ten years. The interest on this debt will confiscate half our current total federal budget when we get to the 21 trillion frequent debtor award level.

    Our unfunded Medicare, Social Security, and federal retirement plans are now approximately 80 trillion.

    The US Treasury is selling debt to the Federal Reserve on Credit.

    The Federal Reserve's balance sheet is exploding with purchases of others debt and obligations.

    We are printing money like there is no tomorrow (maybe there isn't)

    Another 1000 banks will fail in the next 12 months, mostly due to having too much exposure to mortgages and commercial real estate.

    Fannie and Freddie are issuing 125% loan to value mortgages to fix the housing debacle. This will cost hundreds of billions of dollars in the future.

    The Federal Housing Authority is about to blow up because it has been guaranteeing what amounts to more bad mortgages. The FDIC is about broke as is the PBGC.

    And our new know it all government wants to reform health care because it does not know how to fix Medicare, Social Security, and Federal Retirement. In the process, it wants to tax those that receive benefits from their employer and raise taxes on small business owners. Yep, that should create more jobs if you create jobs by reducing discretionary incomes.

    Recovery? Does this sound like recovery? Can this really lead to a real honest to god recovery? I don't think so.

    So where do you put your money?

    I like RDS.A as it is a good hedge against inflation (coming), a good hedge against currency devaluation (coming), it has nothing to do with being green (substance - not hype), you can trust the accounting, they represent real world energy production, and the stock pays a very good 6% plus dividend.

    Where do you not put your money?

    Taxes. The government just wastes the money. So Fire them all. Never vote for an incumbent.

    One Term Allowed

  • Report this Comment On September 08, 2009, at 4:42 PM, ncdsidhuiaola8 wrote:

    I hope this info is better than last weeks buy on Western Union it has went down most days since.

  • Report this Comment On September 08, 2009, at 4:59 PM, 7footmoose wrote:

    when an economy is 70% dependent upon consumer spending and the consumer is walking around with his hands in his pockets, paying down record amounts on existing debt and virtually unable to obtain any additional debt while fearing for his job or looking for a job because he's already unemployed and thinking if I can get through this I'll never ever be able to retire because of increasing taxes potentially skyrocketing inflation rates in the future and the fact that my retirement plan has been terminated, my employer 401k match discontinued and my investments are down 40% from their peak, sure the recession is over but only in the theoretical world of the economists

  • Report this Comment On September 08, 2009, at 5:17 PM, Dannysea wrote:


    Always look for your words of wisdom. Add to the incumbent no retirement if they did not leave a balanced budget and make it law.

    We are seeing a new bunch of businesses going belly-up. Those that we know with reserves are at an all-time low. Even talking to management of services to concert venues and they do not know of any concerts selling out.

    Working in the foreclosures, we see people living better than before the recession; as they are no longer making payments on their houses, but still taking cruises, going out for dinner, etc. All short-sighted boosts in the economy, giving false readings of $$ to spend.

    Prior to this economical slowdown, I watched people talk themselves in to housing being over-valued, and other related perspectives. And now that we have allowed ourselves to be so under-valued, we think it is easy to just click our heels, and we can walk on the yellow brick road again.

    Whoever inherits the next congressional seats, is not going to do much but do fire-control.

    Where are the politicians who are servants of the people? Who even among us is willing to say, I want to leave this municipality, this county, this state, this government better off than when I started?

  • Report this Comment On September 08, 2009, at 5:18 PM, jbrt wrote:

    better sharpen your pencils and be certain they have erasers ..... Manny , Moe and Jack ( Pep Boys ) didn't post any growth QTR. to QTR. , I lost TEN CENTS AND RAN ! . It might be colder winter this year than last , don't kid yourselves . I'm not getting " sucked in " I'LL WATCH , have FUN !

  • Report this Comment On September 08, 2009, at 5:24 PM, freddy365 wrote:

    Why is unemployment soaring?

    The numbers are the worst in over 26 years and getting worse.

    About 1000 banks will fail in the next 12 months, mostly due to having too much exposure to mortgages and commercial real estate.

    Fannie and Freddie are issuing 125% loan to value mortgages to fix the housing debacle. This will cost billions of dollars in the future.

    The Federal Housing Authority is about to implode because it has been guaranteeing what amounts to more bad mortgages.

  • Report this Comment On September 08, 2009, at 5:29 PM, YingandYang wrote:

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  • Report this Comment On September 08, 2009, at 5:51 PM, ohyeachicho wrote:

    Recovery, recovery, are you in delusion? where is the confidence in this economy? I do not see it.

    " Less government" has it nailed. We will sputter under the tax and spend democrats (taxacrats). Do the Republicrats have any leadership?

    I am sick of the far left. Pelosi, Franks, Obama...

    please head for the exit door. Do we really need to wait 1-3 more years?

  • Report this Comment On September 08, 2009, at 6:48 PM, marginjim wrote:

    Those who refuse to learn history are doomed to repeat it. What history am I talking about ? Well, for starters, it's the historical fact that unemployment always continues for a while after a recession has bottomed out. Also, the history - as well as the common sense - that says that money allocated to public works projects takes a whole lot longer than 7 months to get the projects defined, the bids submitted and accepted, the people hired and the jobs started -- and, of course, the economy to benefit.

    As I read all this wailing and gnashing of teeth, I often wonder if the wailers and gnashers are actually hoping that things never get better so they can gloat that they knew, all along, that this would never work.

    The next thing I expect to see is, after everything improves, there will be this orchestrated claim that there never was a crisis in the first place. It was just a ruse by the big government people to panic people into supporting all these big government projects.

    Meanwhile, I'm going to gloat over the fact that the value of my equity portfolio is 11% higher than it was last November, 222% of what it was in March.

    I do feel bad for those 8-9% of the people who are out of work. Funny how being retired and on a fixed income is now a good thing. But the 91-92% of the people who do have jobs and those on pensions and social security who don't need them are doing ok. It won't be long before more jobs are available and the doom sayers will have to find something else to cry about.

  • Report this Comment On September 08, 2009, at 6:49 PM, jimsommer101 wrote:

    Like Don Henley said, "we're workin it."

  • Report this Comment On September 08, 2009, at 7:19 PM, bigcat1969 wrote:

    Actually over 40% of the population doesn't work, employment-to-population ratio is 59.2% and not 91 to 92%.

  • Report this Comment On September 08, 2009, at 7:54 PM, carjjc wrote:

    The above critical comments do not seem match the improvement in the economy. They seem more political. I am glad the Fools give finincial advice no matter who is in office. I believe growth will be slow in the next few years but it would have been much worse had both of the last two presidential administrations not provided resources to the banking industry. I do not think inflation will be a problem for several years either. With slow growth it seems unlikely that inflation will begin when we are not at a much higher capacity utilization.

  • Report this Comment On September 08, 2009, at 8:12 PM, dbooner wrote:

    With unemployment, underemployment and discouraged

    workers the real unemployment level is between 18.5-20%.

    WSJ reported that the gross revenues for the Government are down 18%-20%.

    The middle class are loosing their homes at an alarming rate, because of cut working hrs-job cuts....the foreclosure rate is up 15% over last year for the middle class.

    Ben will be walking a fine line in keeping the U.S. from high inflation.

    The commerical properties are in trouble...maybe already baked into the market? Balloon payments coming due over the next 2 years.

    There may be some green shoots, but there are a lot of thorns to get through first.

    Invest wisely!

  • Report this Comment On September 08, 2009, at 8:45 PM, xetn wrote:

    Have a look at these stats and then try to see a recovery. Especially look at the unemployment graph and we are looking like the 1930's. The government has been trying to "create" jobs with all kinds of stupid incentives like "cash for clunkers" but while it may provide a temporary bonce for Obama's UAW supporters it does nothing to increase real employment.

    Then look at what the Chinese are now investing their money in. (Hint: it is no longer the USD.) They are buying Yen and Euros and the reason is the loss of purchasing power of the overinflated dollar. That is why the dollar-price of gold has jumped up to $1000 again. The dollar hit a one-year low yesterday.

    Yeah, we got is a recovery, it you believe all the Keynesians who are probably scared to death at this point.

    It is not spending that creates jobs, only production creates jobs. You cannot buy anything unless and until something is produced. The private sector is in full retreat due to the government taking most of the capital for all of its phony programs.

  • Report this Comment On September 08, 2009, at 8:55 PM, peters46 wrote:

    marginjim your numbers are wrong. The official unemployment rate is 9%. That does not include those who have exhausted their benefits, those who for some reason were never able to file or just didn't file, or a very large number who are underemployed (part-time jobns, minimum wage jobs when their circumstances indicate a need for 2-3 times that rate, temporary jobs, etc). The real rate is much closer to 20% - one out of five. I do believe that if, somehow, the market improved quite a bit, many people would lose their feelings of hopelessness and go on a (job creating) spending binge on vehicles, homes, consumer goods such as clothing. Purchases they have been putting off for the last year. But I foresee no return of manufacturing to the US. The US has no managers worthy of that title. Most managers are simply just the best boot lickers. I had one tell me he didn't care if I turned out 100% scrap - he just wanted numbers. Another told me she didn't want to be confused by facts, she went by feelings. Their words. And they will hire people off the street at minimum wage to fill high-tech jobs. Manufacturing engineers are just as bad. They can read a technical document, and perhaps even design something, but they have never taken a course in scientifically testing anything, especially process or even material in comparison with another. They have never taken a course in problem solving. Some I had experience with took six months to solve a problem that should not have taken more than six days. Guess what. Six months later the same problem showed up and they hadn't the foggiest idea what it was. I was just a peon in the plant, but I had several people in other parts of the plant come to me asking me to be 'their' engineer, because their engineer either couldn't or wouldn't solve their problems - and I could and would. I even had an engineer come to me asking help in solving a problem in an area of the plant I had only seen at a distance. No management and little in the way of engineering, our only hope of in-country manufacturing seems to be that people might take a hint from the pet food scandal last year and numerous quality complaints about products from a certain unnamed country and start asking for quality and being willing to pay for it.

  • Report this Comment On September 08, 2009, at 9:05 PM, jm7700229 wrote:

    I will not retire by going by economic predictions (actually, I already did and I didn't). There is an apocryphal story that one of the Captains of Industry -- J P Morgan, or Andrew Carnegie or someone, was being offered stock tips by his taxi driver right before the Crash. In 1999, my wife was ready to divorce me because I was selling all of the stuff that her cousin (a hair stylist) was buying. Although I certainly severely underestimated the Perfect Storm that hit the economy and the market, I knew it was coming. That's why I sold Citibank at $35. Not perfect timing, but better than the market.

    Here's the deal, guys. The market is made up of individual companies -- some good, some great, some awful, some getting by. Going by what the market is doing, or what people thing the market will do, is a loser's game. Really good companies will do well in a poor environment; just wait them out. Poor companies often look like they're doing well in a good economy. Whether you are a long term investor (like me) or you chase the latest high-flyer (I won't mention my wife, here), the quality of your individual picks will determine your success.

    Now, does that mean that I buy any and all good companies? Nah -- I like to do a little bit of market timing. If a company has a P/E of 40, I will not even consider it. Won't even go so far as to ask why. That means I missed out on the incredible run-up in (which my wife got a small piece of). It also means I came out of the dot-com crash about really big bucks ahead of what I would have had if I had held on through the bubble. And what do you think I did with that money? I went to Australia, (but only for a month). And then I bought back into some of the companies that I think were dragged down by the burst, and not by their value.

    As I said, I did not anticipate the magnitude of the bust that just happened, but I did have a very large cash position when it happened. Curse me as a market-timer, but I stuffed a lot of that back into stocks starting in April.

    Here's a lesson: every severe market boom or bust is an over-reaction. Sell anything that gets overpriced in the boom (or any other time, actually) and buy the best stuff around after the bust. Remember that you are dealing in individual companies, not stocks, or markets or other abstractions. Diversify your risk, gird for the long haul when the stars are nicely aligned, and you'll do fine.

    By the way, the 2,000 shares of Citibank I sold? I bought them back for around a buck and a half. They've more than tripled.

    As a postscript, the C I bought was a pure gamble play (only $3,000, right?). I figured they may, but probably won't, be allowed to go bust. If they don't, the stock's probably worth uphill of $10. So I figure I'm gambling $3,000 against $20,000, with the odds in my favor.

  • Report this Comment On September 08, 2009, at 10:51 PM, jbrt wrote:

    Geez , sounds great ! any ( if not all decent companies ) have gotten back 100% from their lows less than 8 months ago . I guess some are certain that most will have a " three bagger " in a year . Dream On ! , we all step in every so often . Don't forget to wipe your feet when you enter the house .

  • Report this Comment On September 08, 2009, at 11:25 PM, TxTom wrote:

    Seems folks would rather shout "the sky is falling" than to recognize a recovery when it happens.

    The market "recovers" six to nine months before the economy. That means now (and since March from what I see in my accounts).

    Just wait until employment picks up more, and people are spending as much as always again. If you do, you'll miss the best part of the recovery cycle. Try making money in the stock market after all the stocks are fully valued again. .. .. slow and painful...

    I'd much rather be "in" than "out" at this point. Stay on the sidelines if you don't agree. Its up to you.

  • Report this Comment On September 09, 2009, at 12:24 AM, holosys wrote:

    I was encouraged that only 7 percent voted "The analysts are right: We're going to see a strong recovery with hefty profit growth."

    My reasoning is that such a Pollyannaish view is what creates gargantuan bubbles like the real estate hyperinflation. I bought my Silicon Valley home for $250K in late 1997 to see it rise to almost $900K in 2006.

    The fact of the matter is that almost everyone secretly wants an even bigger bubble so they can bunker-in for the mother of all depressions to follow. The minority often gives a clue to the secret longings of the majority. I known this may sound contrarian but the minority opinion on matters of economics often gives a clue as to the real pulse of the market.

    Like a heart monitor gyrating ever more wildly as a patient has a fatal heart attack, the economy is ratcheting lower then higher in a death spiral... first the hyperinflation of the 1970’s followed by the bust of the early 1980's followed by a faux recovery, followed by a bigger crash of 1987, followed by yet a bigger faux recovery, that seemed to end abruptly in the dot-com bust... followed by a spectacular hyperinflation in housing! And then an even more spectacular bust worldwide!!

    The patient isn't dead yet.

    Obama's CPR team at the Federal Reserve is giving the economy a multi-billion dollar shock to resuscitate the heart. After the initial jolt, the heart is failing again as job loss spirals into the abyss. Obama ordered an even bigger multi-trillion dollar jolt which is happening right about... now.

    This massive jolt will predictably cause the patient to almost jump off the table in a massive spasm of hyperinflation. The dollar will plunge, gold and other commodities speculation will make the Hunt silver bust decades ago look like a game of poker at a sleepy retirement community. Lots of people comprising a shrewd minority will get filthy (and I mean pig-wallowing-in-the-mud filthy) rich, bunkering in for a cushy ride through a decades long Dickensonian depression era, while the majority will become impoverished and bankrupt a la Bangladesh style.

    Those who cautiously spread their wealth over multiple FDIC insured accounts are in for an ugly awakening, when they discover there is no law requiring the FDIC to pay depositors in a timely manner! Look it up if you don’t believe me. A trillion dollar bank run will force the FDIC to quickly pay out its ten billion dollar reserve, and then announce it may take up to a decade to pay the remaining 99% of all depositors. Ouch! The Feds will shove their debt right up our pocket books!

    My advice is to use the next bubble to pay off all debt (with mortgages as #1 priority) and hoard a mix of cash and coins of gold and silver at home in a hidden safe. Instead of keeping large sums in FDIC insured accounts, if possible pay cash for a rental home (or two) in near a major city in a good school district, to rent out during the bust, using a reputable property management firm if not living locally. During an epic depression, you can rent out the property in exchange for goods (such as groceries) and services as well as scarce cash.

    The FDIC can sit on your deposits for a decade while it cajoles Congress into funding reimbursements to depositors, but the bulk of your money will be tied up in cheap real estate you obtained from foreclosures or short sales. You will have enough rental income and cash hoarded -- and cash will be king -- to survive and pay property tax on a paid-off home that only requires utility payments to live in (unless you get the government's tax incentives to fund a solar installation, so you don't even owe on utilities). You will be in the proverbial catbird seat while the majority of people will barely have enough money for a once a week splurge at Starbucks.

  • Report this Comment On September 09, 2009, at 8:42 AM, jbrt wrote:

    WELL SAID ! you sound like my older brother ( the school teacher ) , he used to steal the meat out of my lunches prepared for the next days work on a fishing boat ( and re-wrap them ) , to my surprise there would be mayo' and bread ! NO MEAT ! . FOOL ME ONCE ! , from there on I'd make " dummy " sandwiches , put the good ones in the " crisper tray " , he'd get one slice from the " dummy " and when I'd gotten to work I'd simply throw the " dummies " in the trash ( without even bothering to open ) and enjoy my REAL SANDWICHES ! that were hidden in the " crisper tray " . I was ELEVEN YEARS OLD ! FOOL ME ONCE !

  • Report this Comment On September 09, 2009, at 9:13 AM, Beanfarmer wrote:

    ...investors all over the world took on risk in the run-up of the credit bubble, not really understanding what they were signing up for...

    The tech bubble was not that long ago. I think investors did know what they were signing up for but did think there was risk because the government(s) would take care of it. Unitil government steps back and says we will not help, we are doomed to repeat the same errors again.

  • Report this Comment On September 09, 2009, at 1:27 PM, supplyside2 wrote:

    press your congressman for flat tax legislation and fiscal responsibility. lower the rate and you get expansion. with expansion you get jobs. with jobs you get a healthy economy. the order is pretty much written in stone. stimulus is too little, too late and for the wrong reasons. there is no incentive for me too hire in to my company now. in fact, with uncle sam reaching out to me for more i am thinking of additional layoffs. just my take.

  • Report this Comment On September 11, 2009, at 5:32 AM, ybckorea wrote:

    I see slow recovery is already in the making. The naysayers base their no recovery on the yet to come commercial real estate crisis. They also say that spending is not coming back.

    Spending is slowly and selectively coming back. As people fund their retirement and pay down debt, part of the fear from this past year will give way to the desire to buy things they still want. Many will purchase less but still purchase.

    The commercial real estate market is risky at the moment and may well stay that way. But banks do not want to foreclose on those unless they absolutely have to.

    As we have already seen with the clunkers program, when the incentive is there, so is the money. I expect this to continue and grow steadily in the coming months.

    Housing has hit bottom and is recovering in many areas.

    The one area that is stuck in the mud is jobs. We cannot have real recovery until at least half of those who lost their jobs can find new ones. Why not all? Because some will just quit or retire. Others never intend to work for anybody but themselves.

    Therefore, I am an optimist and fully invested.

  • Report this Comment On September 11, 2009, at 2:06 PM, jomueller1 wrote:

    Analysts should be fired or imprisoned. Their advise is as good as the ratings from the agencies. I learned that the hard way in the tech bubble. Since then I do not believe any word that comes from Wall Street but rather look at the technicals.

    Even economists are suspect because they missed the boat many times. If they were so good they would all be billionaires and pay the universities for allowing them to share their wisdom. Has not happened yet - I wonder why?

    What is clear is that unemployed people are poor consumers. The wealth transfer from inflated real estate prices through taxes to wasteful county governments does not help, either. Though the federal government manipulates the dollar down (opposed to what they claim they want) it does not help the manufacturing sector much as US made products are largely ignored for various reasons. Who would want a US made car? Agricultural products sell well but the low dollar is a benefit for the buyers of produce as it keeps their inflation low.

    US based international companies reap the benefits from a low dollar when repatriating profits. So companies like IBM, P&G, Coca Cola and similar ones are OK to own. Other tan that I stick to gold (which I bought three years ago for a 200% profit) and certain emerging markets with rising currencies.

    Happy investing!

  • Report this Comment On September 12, 2009, at 1:55 AM, falco155dm wrote:

    The recovery is about jobs, plain and simple. With unemployment pushing 10%, we're dreaming if we think it's over..........bummer.

  • Report this Comment On September 13, 2009, at 7:09 PM, dragracerdad wrote:

    As American people learn how to live in a new style, (not all of us are included) things will level out again. This may take several years. The economic forecast would be easier to predict if "big brother" wasn't playing god with American tax dollars. People will eventually become self reliant and fiscally responsible when they realize that help isn't for everyone. Our current government has underestimated the newly allied voice of the American working class. I'll continue to invest in the American dream by being a bit more conservative but making more mindful choices. I've changed my lifestyle just to have more in my retirement chest. A significant portion of that is in our stock markets.

    Read a few reference books about the financial history of our great country. That alone will let you know a come-back is eminent, but the timeline is blurred. Some will suffer more than others. Also some will recover quickly, and some... never. This is what America is built on... CHOICES!

    The one who makes the most good choices is generally a front runner. Make consistent mindful choices and you will be back on the road to financial freedom. Just because you paid for information and/or read it on the Internet doesn't make it correct. Knowledge is a powerful tool. Do research and learn as much as you can while you are able. It pays off handsomely.

  • Report this Comment On September 14, 2009, at 11:01 PM, LessGovernment wrote:

    Dannysea, I like the way you think.

    I am totally convinced the best option for America is a totally new approach to behavior at election time. It is a simple plan. Just fire them all. Never vote for an incumbent. Not for federal, state or even local office.

    Turn the bums out and send a message to our (lack of ) leadership that we have had enough with tax and spend and then tax and spend some more.

    It will take at least a generation to get America back on a sound financial footing because we not only have to come to grips with the ballooning National debt which is now 12 trillion headed to 21 trillion in ten more years, but we also have to come to grips with the even larger problem of the unfunded entitlements of social security, Medicare, and federal retirement.

    So, the way I see it, we may as well start the One Term Allowed movement in the next election cycle. This breaks the back of the special interests, makes political action committees useless, and should bring in new blood willing to work for one full term for the betterment of our country with the goal to leave office with our country in better financial condition then when they first arrived instead of enriching themselves at our expense.

    We need simple voter reform too, like passing a law that states only registered voters in the jurisdiction of the election being held are allowed to give anything of value to a candidate. This would not only preclude a PAC from donating money to a candidate in another state, it would make it illegal for a PAC to make a donation at all, same for unions, same for corporations that like to loan airplanes and hotel rooms, etc. After all, if you can't vote, why should you be allowed to donate at all? We really don't need anything fancy. We just need to throw out the garbage and then make common sense changes. Keep up the fight and we will get there.

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