Strong Earnings are Not Helping the Economy
How can this be? It’s simple, they currently are just added to the cash hoard of the big corporations. The over-riding issue of private debt is the elephant in the room. The deflation of the real estate boom will take a long time to overcome. This has led to the low consumer confidence numbers that we have seen over the past few months.
With FinReg now passed Washington needs to work together on innovative ways to get the electorate positive again. I will say the same thing that I have said since early 2009, Alternative Energy is the country’s biggest need and a massive trillion dollar program, rather than the timid programs so far, will be needed to get us kick started again. That along with employer tax cuts tied to long-term employment initiatives will work.
At the moment the stock market has been like a yo-yo this week and another run at the 200 day average of 1113 on the S&P could be in the making, but there still needs to be a catalyst for gains beyond that level. In the meantime the 890 value level still looms.