Tuesday, February 9, 2010

"Recession" = Sanity...

Good article from Old Hop.

The way I understand it: "Recession" is when the economy corrects itself back toward sanity, and everybody who was buying crap they don't need stops buying crap they don't need and starts spending their "discretionary" income -- if any, considering the fact that if you make stuff people don't need you will shortly be out of a job or out of a business -- on sensible stuff they, if not now, will need in the future. Their focus is on saving, and their consumerism is limited to purchasing "stuff" with long-term use and true resalable or tradable value.

It is frightening how much of our economy depends/depended on creating buzz or false need for useless items.

If you are in business to make crap that people don't need, you need to get into a business that makes "stuff" people need.

Otherwise, see the first paragraph, because you are SOL.

And another thing: If you are someone who gets their economic information and outlook from TV "stock advice" shows, a la Cramer, or reads the WSJ Stock pages, then you may be in for a shock when the promised "recovery' doesn't happen and when the economy gets worse.

The reason we seem to be in what we are being told is "recovery", is because companies are showing profits with more production per person, but less production overall. They are cutting salaries and employees, and showing more profit per person, but there is a smaller market, fewer people employed and purchasing product. This will eventually catch up as more jobs vanish, and the government "safety nets" fail.

The effective unemployment stands at 15-17% right now. Don't expect that to improve.

We chose to "rescue" useless banks instead of instituting some sort of National work program improving our crumbling infrastructure.

Payin' the piper. I can hear him winding down the glen right now.

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