Too Late For The Fed To Prevent Recession

[marmar]

from 24/7WallStreet:



Too Late For The Fed To Prevent Recession
Posted: August 4, 2011 at 6:24 am


Markets rose yesterday, to some extent on a belief that the Federal Reserve would try to boost the economy through a third round of quantitative easing. This has become known as QE3, a reprise of the QE2 program whose effects may have begun to be felt earlier this year. It won’t work this time. The economy is already too far gone.

The QE2 program was put into place in very late 2010. The Fed bought U.S. sovereign debt to keep down interest rates. The plan may have worked. It is hard to say because during the same time investors moved into Treasuries as safe havens because of, among other things, a liquidity and credit crisis in Europe.

Whatever the impact, the Fed began its purchases in a period when the U.S. economy was mustering strength. Unemployment improved through most of the first five month of this year. Consumer confidence moved higher, as did business activity. Some of this may have been due to extension of the Bush tax cuts. There were too many “economy improvement” plans in place to say that any one was the most essential.

The economy began to slow some time in the spring, and has gotten worse since. There is a fear that U.S. GDP did not improve at all in July. Consumer confidence has plunged. PMI data show trouble in the business sector. Employment numbers have worsened. Housing has never recovered and continues to deteriorate. ...........(more)

The complete piece is at: http://247wallst.com/2011/08/04/too-late-for-the-fed-to-prevent-recession/#ixzz1U3gLNfIC

[DCBob]

1. According to the "experts" the downturn in the first half of this year can be attributed to..

Japan disaster, weather abnomalities in US, and high price of oil. It actually reassuring our economy was able to withstand those pressures and not tank even more.

[marew]

2. Ah, but the wealthy are doing just fine!

According to the NYT, "Even Marked Up, Luxury Goods Fly Off Shelves."
http://www­.nytimes.c­om/2011/08­/04/busine­ss/sales-o­f-luxury-g­oods-are-r­ecovering-­strongly.h­tml?_r=1&n­l=todayshe­adlines&em­c=tha23
I can just hear some reader say I'm jealous because I can't afford a Chanel sequined tweed coat with a $9,010 price that already has a waiting list. But anyone who knows me, knows better. I look at the suffering of the people in our country and all over the world, the suffering of all the homeless animals. Christian Louboutin “Bianca” platform pumps, at $775 a pair, would never look good to me even I could spend that kind of money on a pair of shoes.
The article continues, "the top 20 percent accounts for close to 60 percent of spending.” So why would business be interested in the middle classes and the poor, the people who have been most hurt by the economic crisis in this country when the retailer can overprice luxury goods and get the biggest return on their investment­. "Wal-Mart is selling smaller packages because some shoppers do not have enough cash on hand to afford multipacks of toilet paper."
Something is missing here. So sad, very sad.