mikeandgerry wrote:People, people, people...
The economy always gets better...eventually. The questions are: How long will it take and by what measures has it improved?
As for the current stock market rally, Soros and others feel this is a sucker's rally. As for banking, money is beginning to move but not much. There are two bubbles breaking now: treasury notes and commercial real estate. One is pushing stocks upward and the other is pushing the balance sheets of banks and corporations down. The result is the stock market sucker's rally and, you can expect further slowdown in the economy.
The banks are showing profits because they have trimmed their expenses through merger and aquisition and some have failed and removed themselves from the playing field. That gives the others better assets and opportunities. Tarp funds have enabled banks to stop selling assets to pay their default obligations. The bleeding has been stopped as a result of Fed and Treasury action under both Bush and Obama.
The problem now is that we may be in a long period of stagnation. There is a lot of overvalued property debt to work off. That will take a considerable amount of time. It will be a drag on the economy for years. There is no way around it. All efforts are to spread it far and wide to lessen its effect and share the costs.
While I didn't feel this was the right approach, it will work...eventually. I preferred the crash and burn method. It would have delivered swifter justice to those who caused the problems. Under the Obama plan, everyone pays. The government could have spent its money restoring those who were innocent but received collateral damage. Instead, we saved the problem children and let the economy sink.
What they've done is prolonged and augmented the agony. We desperately needed a major reset. Problem is...the folks that allowed this to happen...that ignored the facts or were just too stupid to realize what was happening, are now the same people that millions are trusting to fix it. WTF...over? Common sense tells us that if you hire someone to run your business and the run it into the ground that you do not look to that person to bring you back to solvency. The foundation is so broken that it's just a matter of time before the whole house comes tumbling down. It is inevitable.