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- No commodity investments today…
-
Bloomberg really screwed up this
time -
Thinks can’t get worse…and that’s good
news?
I know – I’m supposed to talk about gold or oil or coal
again today. That’s what you were promised as a reader of this
publication.
I hope you’ll
forgive me, but today’s missive has little to do with commodities.
I read an article that just can not go unmentioned. It’s
either the funniest and best written nod to George Orwell I’ve ever seen, or
it’s a frightening representation of the world we live in.
Before I go on, you should take a look for yourself – it
truly must be seen to be believed.
Economy Avoids Recession Relapse as Data Can’t Get Much Worse
I don’t like beating up on
Bloomberg, because I think they write some of the best market commentary
you’ll find anywhere. They have an inside track with top minds in the
financial sector, and they provide solid financial data.
But when you write something so bizarre, so dystopian and
nonsensical, you’re forcing my hand. I have to address it.
In case you didn’t read the article, here are the offending
statements:
“The U.S. economy is so bad that the
chance of avoiding a double dip back into recession may actually be pretty
good…The sectors of the economy that traditionally drive it into
recession are already so depressed it’s difficult to see them getting a lot
worse…”
So, the good news
is: the economy is doing so poorly already that it’s unlikely it could get
much worse. The current levels of production and employment are already rock
bottom, so a contraction from this level would be difficult.
That doesn’t sound like good news. It sounds as if we may
“avoid” the arbitrary and largely academic definition of a recession, because
the economy can’t get any worse.
As you might not be aware, the definition of a recession is
two straight quarters of shrinking GDP.
It would be like getting a letter of congratulations from
the fire department, telling you that you’re house can’t burn anymore because
it’s already a pile of cinders.
It’s not good news that Bloomberg’s experts think we can’t
slow anymore. It’s bad news.
Moreover, it sheds a huge spotlight on the problematic
definition of “recession.”
If the economy is in a ditch, what kind of deranged person
is cheered if it doesn’t get any lower? It’s already in the ditch. Maybe we
need a better definition of “recession” that doesn’t let economists
white-wash the situation with technicalities.
If we’re near rock bottom with little good news to hang our
hats on, maybe we’re still in a recession, and any growth or progress of the
past 18 months is a sham, an illusion, a mirage.
As I’ve said before, real
unemployment is sky high. If we don’t lose more jobs, that’s little
consolation for me. Millions of Americans have been unemployed for months and
months. Many more have given up hope of finding work. Others never really had
a chance. So while Bloomberg is whistling by the graveyard with their “good”
news about avoiding a recession, there are MILLIONS of people in this country
growing increasingly desperate.
If we’re not in a recession, what’s the use of the
word?
A sideways economy at this level of employment and
production is not sustainable, no matter what the academicians say.
As I said, I’m a fan of Bloomberg’s commentary most of the
time. But it might be a sign of the times when even the best and brightest
members of the financial press begin to look at the market through
rose-colored glasses.
There’s no specific commodity investment I’d recommend to
benefit from this trend – but I will say, once again, to second guess
everything you read from the mainstream media.
Do your own homework and come to your own
conclusions.
Good investing,
Kevin McElroy
Editor
Resource Prospector