The IUSB Vision Weblog

The way to crush the middle class is to grind them between the millstones of taxation and inflation. – Vladimir Lenin

Bear market recovery – economy stalling again.

Posted by iusbvision on July 1, 2009

After a big crash many stocks and investments are left undervalued and people will buy, so some aspects of the economy as a result perk up, but eventually the “recovery” stalls and stocks fall again, hence the term “bear market recovery”.

Yahoo Finance:

U.S. consumer confidence took an unexpectedly steep slide in June, figures released on Tuesday showed, suggesting the 18-month-long recession had yet to loosen its grip on the economy.

A separate report on April house prices in major cities offered some encouraging signs that the worst of the housing slump may be over, but that was not enough to lift investors’ spirits, while another crop of economic data showed business activity in New York City and the Midwest remained weak and retail chains slogged through a rough June.

Billionaire investor George Soros added to the cautionary tone, saying fears of inflation would drive up borrowing costs and choke off growth once financial markets recover.

Wall Street Journal:

Stocks slump as quarter ends.

A shaky consumer-confidence reading that aggravated investors’ fears of weak profits and a prolonged recession pushed stocks lower on Tuesday.

New housing data were also glum, though the market managed to hold steady at the open following their release. The losses in major indexes began to pile up about a half-hour after the bell, when the Conference Board said its index of consumer confidence for June fell to 49.3, from a revised 54.8 in May, which was originally reported as 54.9.

The foreign investors are worried about inflation and a decreasing dollar amid our insane “print it up like there is no tomorrow” monetary policy. UPDATE – Dollar falls again… (LINK)

Wall Street Journal:

Private-sector jobs in the U.S. fell 473,000 in June, according to a national employment report published Wednesday by payroll giant Automatic Data Processing Inc. and consultancy Macroeconomic Advisers.

The expected loss exceeds the 400,000 drop forecast by economists in a Dow Jones Newswires survey and suggests that layoffs may be worsening.

The ADP survey tallies only private-sector jobs, while the Bureau of Labor Statistics’ nonfarm payroll data, to be released Thursday, include government workers.

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