Analysts Expect Reports on Spending, Home Sales to Show Decine in November – Naked Capitalism
by Tom on December 22, 2008
in Market Musings
Yves has a thought provoking article about the economic reports. Read it, and then I’ll have more comments afterwards….
……Despite a not-as-bad-as-feared Black Friday (the day after Thanksgiving), retail sales fell in November. Analysts expect the financial releases next week to show a continued contraction in consumer spending (a broader measure, including services, is due for release this week). And housing data is anticipated to be not-so-hot either.
I don’t pretend to have any feel for markets, but I was struck earlier in the month how the stock market shrugged off almost all bad news, but did not react much to the announcement of the auto industry rescue. True, at that point, observers may have assumed that it HAD to happen, so the confirmation that it was on was a big yawn.
But I wonder if investors are somewhat uneasy that the Fed (and soon the Administration) are moving into uncharted territory with the size of the programs on tap. Although the consensus among economists is that these programs will succeed (albeit with the risk of substantial inflation down the road) the flip side is the consensus among economists was that (until recently) we’d have no or only a shallow recession.
naked capitalism: Analysts Expect Reports on Spending, Home Sales to Show Decine in November.
Yves raises a couple of good points:
- The fact that the markets shrugged off almost all bad news makes me wonder what’s happening there. Is it acceptance or denial?
- The government announced the last minute band aid for the auto makers and the market said, “Oh yeah, whatever.” It would seem to me that the reality of the government’s need to intervene would be a sobering effect on the market.
- The consensus among economists are that the programs will work, but these are the same economists who said, “This will only be a mild recession.” Economist credibility is kind of an oxymoron don’t you think?
Have a good day and stay tuned……
