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Mascoutah, Illinois | I believe the Europeans have more trouble than just the banks. Their PMI numbers were terrible last week when they were released. Even if they ease next week, will it be in time? Federal Banks are always slow to react in easing because they need to see a recessionary number more times than not before they ease. The only problem is the recession has already started usually four to six months prior to the data catching up with the government reports. If you look at Oracle's miss, Caterpillar's miss, Federal Express' miss, and now today Dollar General comes in light on revenue and Gordman's just gave a terrible report and guided way lower for next quarter. I am going on record as saying we will be in recession before the end of 2013. I already believe parts of the country are in recession, but the economic data from the government has not caught up yet.
What does the Fed do? Interest rates are at basically zero so they cannot cut. The President has planted himself into a corner because he let the Payroll Tax Cut expire, he was able to move the top tax bracket back to 39.6%, and by the way don't forget the 3.8% Obamacare Tax as well. If you are in the 35% tax bracket, your taxes have been raised over 9%. But to get the arithmetic correct, you have to realize it is not a 9 plus percent increase in taxes, it is 9 plus percent tacked on to the 35% which nets you an increase of just over a thirty percent increase in taxes. In doing the math, that is some serious "jack." So what does the current administration do, ask for a stimulus package? Wouldn't that be the most hypocritical thing they could do? So I have to believe they will do it because they have no other option. The Fed can print all day long, but if the consumer isn't getting anymore money, this economy cannot grow its way out of this mess.
Times are interesting and I believe they are going to get a great deal more interesting before 2014 gets here. | |
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For Iowegian and others Re: Banker conversations.
