Zeev's Turnips Patch-No Politics (ZEEV)

[fabian]

Fishweed. You are welcome. We're aware this view is not what we were thinking a month ago.
The evidence we were looking at required a radical change in that opinion.
We'd like nothing better to be wrong about our present long term concern for the markets and the economy.
It is likely we are entering a recession.
The economy was at near stall speed.

Market turmoil this week and last has shaken a lot of investors.
40% of spending comes from the highest 20% income earners.
That is important.
These are people who invest in the stock market and follow it and their portfolios.

In talking with my buddy who manages a lot of money for high net worth investors, he's already hearing some say they are going to cut back spending.

Not that they have to. That's not the point. It's about the psychology and recent developments and volatility in the stock market has them appropriately concerned. People tend towards hunkering down and being more conservative with spending when they see and feel what is [lately] been going on with their investments.
Also, the IBD/TIPP optimism index which just sliced lower than the low at the depths of the last recession/financial meltdown.

These are just two of the reasons we think we've entered a recession already. Which means, no relief for the unemployment situation and lower than expected tax revenues down the line [bigger deficit].
We feel it is a near certainty the Fed will have to take extraordinary measures.
We do not expect those measures to be any more succesful than QE2 was. [It boosted stock and commodity prices but stock gains have quickly gone poof].
QE-2 did not boost economic growth.

Earnings expectations for corporations will be revised downward.
Hope were off base. There is no pleasure in holding these beliefs or talking about them.

Fabian