The National Bureau of Economic Research declared that the Great Recession concluded in June 2009, marking over two years of economic recovery in the U.S. However, one must wonder about the nature of this recovery.
It has felt rather strange. One moment, media outlets were reporting on what was described as the most severe economic downturn since the Great Depression. The next moment, there was a surge of optimism regarding economic recovery.
From our perspective, after extensive government stimulus and unusual monetary policies from the Federal Reserve, the only significant shift we noticed was a swift and sustained recovery in the stock market. We still suspect this is merely a fleeting rise—a classic “dead cat bounce.” Given the massive influx of printed money over the last few years, a steep market decline could easily be obscured by inflationary pressures.
Nonetheless, outside the walls of Wall Street and in the heart of Main Street, where the real economy thrives, we’re left grappling with a pressing question as we evaluate the current financial landscape…
Where are all the jobs? A seemingly straightforward question, yet one that remains unanswered. Here’s our perspective… Continue reading
It’s unfortunate that folly often goes unchecked until it’s too late. If only reasonable voices could intervene before someone embarks on a foolish endeavor. Instead, they often congregate, sharing misguided laughter like a pack of hyenas.
Consider Philip A. Contos from Parish, NY. Last Sunday, he joined friends for a helmetless motorcycle ride. While he likely pondered the absurdity of helmet laws and relished the freedom of his choice, he tragically lost control of his Harley Davidson, resulting in a fatal accident.
Reports indicate that Contos might have survived had he been wearing a helmet. His demise illustrates a harsh truth: foolishness cannot be legislated away. So why implement helmet laws at all? Unfortunately, this lesson may be too nuanced for lawmakers to grasp. They are likely busy drafting new regulations to ban helmetless protests against helmet laws.
We at the Economic Prism share this tragic story not for entertainment value… Continue reading
Last week, the stock market experienced a remarkable jump, the highest in over two years. By the end of the week, the DOW had risen 5.4 percent, the S&P 500 was up by 5.6 percent, and the NASDAQ saw a growth of 6.2 percent.
This surge seems to have been driven by the Institute for Supply Management’s manufacturing index, which improved from 53.5 percent in May to 55.3 percent in June. Additionally, the passing of austerity measures by Greece’s parliament and the conclusion of QE2 contributed to the market’s positive movement.
On the matter of Greece, European finance ministers must now deliver a promised bailout in response to their austerity measures. As for the end of QE2, our opinion remains skeptical. The markets were already aware of when QE2 would conclude; it begs the question: why would the official end date serve as a cue to buy stocks?
Regardless, we believe that QE is not yet finished. While the stock market soared, the real activity was observed in the bond market, where treasury yields experienced an even sharper increase… Continue reading
[Editor’s Note: Today, we pause our usual commentary on financial matters. With Monday being Independence Day, we hope you’ve already begun your holiday weekend. Before you hang out the flag or fire up the grill, here are some reflections on our great nation. Enjoy!]
“Myths and legends die hard in America.” – Hunter S. Thompson
America’s Endearing Government
Today, the principles that ignited America’s War of Independence have regrettably faded into mere notions. The idea of limited government and personal freedom has long been replaced by expansive bureaucracy and collectivism. Gone are the days when one could earn a living without the IRS complicating matters, much less when a child selling lemonade could do so without facing a bureaucratic shutdown for lacking a permit.
Over the past century, Washington has evolved into a financial vacuum, where countless lawmakers and their aides labor to create new regulations that extract money from the populace. Continue reading
In reviewing the current economic climate, we find ourselves questioning the reality of recovery and the implications for everyday citizens. As we navigate these complex issues, it’s crucial to maintain a clear perspective on the broader economic environment while also considering the deeper societal impacts.