Signs that Bernanke is working behind the scenes on Capitol Hill to promote more short-term fiscal stimulus....on top of his latest QE2 pursuit...goes to show just how fragile this economy still is. We will be happy to switch gears and turn uber-bullish once we can become convinced that the public sector no longer has to sustain private sector activity...
Go back to the 1930s — we had a very nice stimulus-led economy and stock market from 1933 to 1936. But once the government began to take its foot off the accelerator, we had the severe 1937-38 recession and bear market. Investors could not see beneath the surface of just how fragile things really were in that 1933-36 period — the economic growth was hardly organic as history has shown us. The biggest mistake the bulls made back then was overstaying their welcome.
---ibid
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