Monday, December 17, 2012

Nothing Has Changed In The Economy

Economically speaking the numbers out this morning would lead any sane person to say, "nothing has changed on the ground" even after central banks have dumped trillions of dollars into the system. Much like in 2007 when the markets ignored reality, the markets are generally moving upward on the bad news, the following article by Gregg Robb was placed on Market Watch following the release of the data: 

WASHINGTON (MarketWatch) - The Empire State manufacturing index remained in negative territory for the fifth month in a row, the New York Federal Reserve Bank said Monday. The index fell to negative 8.1 in December from negative 5.2 in November. Readings below zero indicate a decline in activity. Economists polled by MarketWatch expected the index to return to positive territory near 5.2. Details of the report were also weak. The key new orders sub-index fell below zero after returning to positive territory in November and shipments also retreated.

Another article went on to explain that investors are shrugging off economic data to focus instead on budget negotiations in Washington which appeared to make some progress over the weekend. When will people realize that nothing has changed? Like a boat on the ocean the economy is riding the wave of deficit spending.

A Foot Note, added January 9th; A headline like the one this morning, should give one pause, "floundering food stamp growth will hurt grocers".


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