STOCK MARKET WATCH -- Tuesday, 2 July 2013

[Demeter]

20. When is a recovery not a recovery? When it's a "stealth recovery" (aka "bubble")

Call it a ‘stealth recovery’
Commentary: Without fiscal restraint, growth would be strong indeed

http://www.marketwatch.com/story/call-it-a-stealth-recovery-2013-07-02?siteid=YAHOOB

The U.S. economy is stronger than it appears, and that is why interest rates have begun to rise.

Don’t take my word for it, ask the chairman of the Federal Reserve, Ben Bernanke.

Back in May, while just about everyone else was bemoaning the weakness of the recovery, Mr. Bernanke determined that the economy had shifted into a higher gear and didn’t need as much help from the Fed as it did earlier on.

In Bernanke’s estimation, it was time to prepare the financial markets for less ease. However, since the markets had grown so dependent on easy money from the Fed, Chairman Ben deemed it prudent to employ the open-mouth policy before actually changing the central bank’s open-market policy, so he began hinting at a “tapering” of the Fed’s bond purchases.

Still, it was quite a shock to the markets to realize that easy money was not actually going to last forever. Some participants figured that the economy must have been stronger than they realized, although they were in the minority.

After all, the unemployment rate was still high, even though it was a half-point below its year-ago level. The percentage of the unemployed who had been out of work for 27 weeks and over was still higher that it was four years earlier. Adding in the underemployed and those who dropped out of the labor force made things even worse.

For its part, business was concerned about a lack of demand, and in some cases, insufficient pricing power.

Nevertheless, the markets got jittery. Stocks tanked, while bond yields jumped.

In an effort to assuage investors, several Fed officials asserted that the markets misinterpreted the Fed head’s words. They pointed to the weak job figures as a sign that stimulus would remain.

All well and good, but if you drill down, you will find an economy that is doing a lot better than the conventional wisdom believes...

This debasement of the English language and the precise scientific meanings of words is why propaganda is so destructive.

Without jobs and increasing demand and due payment of productivity gains to the productive: ie: WORKERS, all you have is economic masturbation by computer software: self-stimulation that goes nowhere and does nothing genereative. It's the endpoint of the narcissism that dominates this culture to the exclusion of everything else.