Thursday, 26 March 2009

Chart Perusal: Your source for charts on the stock market and economy

U.S. Economy Shrank 6.3% in Fourth Quarter as Profits Fell Most Since 1953

Well, it shouldn't surprise anyone that U.S. GDP contracted more than estimated. The economists, government, and media have been underestimating this contraction for the past 17 months. But apparently it contracted more than estimated. Before you start listening to economists, government, and mainstream media you should have a look at their track record of predicting things. If you do your research, I think you will find that it isn't very good. In fact, it's terrible. "Current events form future trends." If you start waiting for other people to tell you things, you will always be late getting the information and it will probably be distorted. For example, in January 2008 the market plunged -6.12% and was the worst January EVER in the entire existence of the U.S. stock market. It doesn't take a genius to figure out that maybe 2008 wouldn't be so good for the stock market and the economy. Now, we have Bernanke and Obama telling us that the recession will end this year and that the economy is going to turn around. This is coming from people who didn’t even realize the crisis was coming. Well, I would like to see some concrete evidence rather than just sanguine cheerleading. Excerpts from the Bloomberg article today are below.

"The U.S. economy shrank in the fourth quarter more than previously estimated, leading to the biggest plunge in corporate earnings in a half century and underscoring why companies are slashing payrolls this year..."

"The economy has lost more than 1.2 million jobs this year as companies trim costs and rebuild profits..."

"Consumer spending, which accounts for about 70 percent of the economy, fell at a 4.3 percent pace last quarter, marking the first back-to-back decreases in excess of 3 percent since record-keeping began in 1947...."

"The World Trade Organization this week predicted global trade will decline by 9 percent this year, the most since World War II. Worldwide industrial production this year may fall by as much as 15 percent and the global economy is likely to shrink for the first time since World War II, the World Bank said on March 9..."


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