We are in for a tough time for the next fee years if the chart below, showing a big dive in economic development expectations, is any indication – and here is probably why that is the case. (Words: 200; Chart: 1)
So writes Monty Pelerin (www.economicnoise.com) in edited excerpts from his original article* entitled Things Are Getting Worse!.
Lorimer Wilson, editor of www.FinancialArticleSummariesToday.com (A site for sore eyes and inquisitive minds) and www.munKNEE.com (Your Key to Making Money!), may have further edited ([ ]), abridged (…) and/or reformatted (some sub-titles and bold/italics emphases) the article below for the sake of clarity and brevity to ensure a fast and easy read. The author’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article. Please note that this paragraph must be included in any article re-posting to avoid copyright infringement.
Pelerin goes on to write, in part:
H/T to Reader NII for sending this:
[Chart 3 below showing the % of companies expecting the economy to improve is] yet another reliable indicator suggesting QEs is not having any effect on Main Street….[although] the uncertainty of tax policies in 2013 may have had a over-sized impact on the expectations of small businesses as it is the small business sector of the economy that would be hurt the most by “tax loophole” closings.
It may be that small businesses counted on a Romney win with a Republican control of the Senate and with that, no major changes in tax policies. Small business…[probably] thinks that Obama will get 90% of what he wants in the Fiscal Cliff/tax policy area [and that] some of those changed policies [would] hurt. Remember, small businesses accounted for over 60% new jobs over at least the past 3 decades.
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Goldman Sachs has been out with a number of reports in recent weeks highlighting their positioning for 2013. While it’s important to keep in mind that these kinds of reports are no holy grail… it is always good for brain storming and, after all, it’s not like Goldman Sachs is a bunch of dummies.
[As the New Year approaches it is becoming more and more imperative that we] find our internal inner joy…[and] maintain our positive perspective…while the external world around us deteriorates thanks (actually that should read “no thanks”) to all those…who caused or enabled the current financial and economic trauma. We must face up to the fact that the current financial path of the United States is unsustainable and will probably not result in a “Happy New Year” for most Americans in 2013. As such, we must do something utterly different. Words: 620
…Fiscal policy, both in the U.S. and in Europe, has already been a drag on economic growth, and it’s extremely likely to continue to be one as politicians begin addressing concerns about long-term debt burdens. The debate about the fiscal cliff deal might revolve around the preferred paths to reducing the nation’s long-term debt, but it also will determine just how much fiscal policy will limit growth over the coming months and years. What’s really at stake, in the near term at least, is the answer to two important and interrelated questions: How dysfunctional is our political leadership and how bad is our economy going to be next year? Words: 610
Until policymakers see the light, it’s very slow and steady as she goes, with a chance of higher inflation on the horizon. This is not necessarily bad for the stock market, however, since I continue to believe that both stocks and bonds are priced to the expectation that growth will be very weak or even negative in the years to come. Words: 696