Paul Volcker, head of the Economic Recovery Advisory Board, has some unique thoughts about the current economic crisis. He stated that it is "leveling off at a low level", but a second stimulus package may not be needed. He also stated that the recovery may take years. We are still in intensive care.
What a mixed message, and what does the Economic Recovery Advisory Board do? It seems like we are in the new Age of American limits. Limits on power, limits on growth, limits on potential. Yet, the stock markets still rises. In the Age of Limits, this will have to stop. If growth will be curtailed then earnings will have to slow. Once the positive surprise of any corporate announcements end, we will adjust to a flatter earnings growth curve. In the Age of Limits, we will not be able to grow our way out of deficits. The forecasts for the second half of this year and 2010 will be too optimistic.
What a mixed message, and what does the Economic Recovery Advisory Board do? It seems like we are in the new Age of American limits. Limits on power, limits on growth, limits on potential. Yet, the stock markets still rises. In the Age of Limits, this will have to stop. If growth will be curtailed then earnings will have to slow. Once the positive surprise of any corporate announcements end, we will adjust to a flatter earnings growth curve. In the Age of Limits, we will not be able to grow our way out of deficits. The forecasts for the second half of this year and 2010 will be too optimistic.
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