DRS112

Stocks are gaining, the dollar is climbing, gold is dropping, some say the sub-prime crises has bottomed out or will soon. All of this among a near collapse of Bear Sterns and another rate cut by the fed which should cause inflation.

So it makes me wonder. Is the worst over? Instead of seeing a major correction in the market, did we see only a leveling off of sorts? To be honest I'm perplexed by the economy right now that has so many facets contributing to the current goings on that any one failure or the combination of a few failures could send the economy reeling.

Or is it only a calm before the storm? Which would bring hopes of being able to postpone any major correction in time for the government to get it's act together and restore global confidence in the dollar through it's fiscal policies? Truth be told I don't have a lot of hopes of that happening. My choice is either the Republicans who talk the talk about fiscal responsibility but don't walk the walk, or the Democrats who talk a big game about balancing the budget while at the same time talk about the major social programs they want to implement.

I don't know which...but the next few weeks should be interesting.

cheapseats

In a word, no.

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DRS112

Well, for quite some time now I have railed against the fed, the worthless fiat dollar and a government that has shown zero fiscal responsibility. I've felt that it was possible that within the near future that we could see a collapse or near collapse of our economy because of it. And then I started to re-examine my views on all of that. And then this recession happened...

But none of us know with certainty that it won't get worse or that it will get worse....

So...out of curiosity...other than no., the worst in not over...what's your take?

cheapseats

Let me ask you this, first. What made you re-examine your views on "the fed, the worthless fiat dollar and a government that has shown zero fiscal responsibility"?

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The_Heretic

Think of it as a momentary speedbump on the way downhill. That sudden upward force makes you think you've hit bottom and then you find out there's no ground under you anymore.

A sort've Dowjones Wild E. Coyote.

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John McCain: "He's in Iraq... with a few centuries to kill."

DRS112

I'm sorry...I haven't re-evaluated my views on the government with no fiscal responsibility...that's my fault for not being clear...I have been re-evaluating my views on the monetary system....

And to answer the question...I don't have an answer...it's a combination of a lot of things...and not that I made my mind up about it...just that I question my past beliefs...

VKMHVM2

TO THE MOON and beyond!

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It's All Here!

Dr. Albert Pastore: An Independent Investigation of 9-11 and the War on Terrorism

cheapseats

Lucky you. I am obliged to question my sanity.

Tell you what, though. I am endeavoring to compose some thoughts on this matter, after which you will perhaps be good enough to weigh in on the sanity thing.

If enough people declare that I am out of my mind, do you think the government is obliged to support me, at taxpayer expense, and otherwise look out for me? Or do you think that crazy people should simply be mainstreamed? Here, here's a menial job...best of luck to you.

For the moment, suffice it to say that the continued increase in the price of oil...that alone...will keep us good and screwed up. Well, not everyone.

Do I or do I not understand correctly that the gasoline we pump heedlessly into our cars is about the LEAST aspect of our extravagant oil consumption? Petroleum-based products...where AREN'T they?

The credit crisis will worsen.

The full impact of the housing crisis hasn't even registered. Real estate hasn't even hit bottom.

They're staving off recession by A.) denying it, B.) bailing people out, C.) lowering the interest rate-read-that-giving-speed-to-speed-freaks, and D.) sending piddly-ass, feel-good tax rebates.

Wanna know how stupid our government is about money? It/They/He/Whoever is sending LETTERS before the checks, saying that the check is in the mail.

Quick! GAO! Step up! What's the total bill on the printing, paper, envelopes, postage and time for that little buy-more-time bullshit?

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DRS112

Thank you...I was just wondering your opinion...nobody is going to know for certain...So...here's forbes take on it.

2008 Small Business Outlook
Where Is The U.S. Economy Going?
Paul Maidment, 03.17.08, 2:20 PM ET



You can forgive entrepreneurs their pessimism about the economy, though it may well be misplaced.

While the rest of 2008 looks a bit rough, and the fire sale of Bear Stearns to JPMorgan Chase has the doomsters swapping the "R-word" for the "D-word," the darkest clouds may be lifting on the horizon, even if flat growth--or worse--is already here. Better still, Congress is giving small-business owners an investment tax break on top of the $168 billion stimulus package it is preparing for consumers.

How much will those two measures stimulate spending and investment? The answers differ by region and industry. For instance, as conditions soften in New England (thanks to cutbacks at big banks stung by the credit crisis), economies in the West South Central region (buoyed by energy companies) are still chugging along.


Analysts at PNC Bank estimate the stimulus package will boost gross domestic product by 0.5 to 0.7 percentage points in the final three quarters of the year. That could be enough to push U.S. economic growth for the full year to 1.3% to 2%, the Federal Reserve forecasts. (PNC forecasts 0.7%.)

Business And Consumer Spending
Psychology might play as big a role as any, increasing the willingness of individuals and business customers to loosen their purse strings.

Household spending, which accounts for 70% of U.S. GDP, held up well until the end of last year, turning flat in December after having grown at a solid 2.2% clip during the previous three months.

What matters now is how consumer confidence holds up in the near term, especially in the face of a more uncertain unemployment outlook, with more small businesses notably reporting cutbacks in hiring plans.

Capital investment, too, is likely to grow less robustly this year than last, as firms expect the cost of that capital to rise at a time when demand for their products is uncertain. But, as Jeffrey Lacker, president of the Federal Reserve Bank of Richmond noted last month, while there are some signs that investment is slowing, the most recent monthly indicators still suggest some forward momentum.

Availability Of Credit
Entrepreneurs can only hope their bankers will continue to accommodate.

For small fry, the cost of money isn't the issue--it's the availability. Even creditworthy borrowers find their bankers continuing to be loan-averse as the credit crunch wears on.

So far, evidence of tightening credit standards for small business remains anecodatal, although the worry about it among owner-managers is real. The niggling concern is that Bear Stearns will prove to be prologue--rather than epilogue--to the credit crunch.

The degree to which credit availability is a problem to small-business owners varies from industry to industry. Anything housing-related is tough--bad news for entrepreneurs who use the equity in their homes to finance their business. But exporters and high-end luxury businesses, for example, are not reporting significantly more difficulty in getting the credit they need.

The overall picture is mildly gloomy. A survey published in February by credit card issuer Discover Financial Services (nyse: DFSWI - news - people ) found 43% of small businesses with fewer than five employees had experienced cash flow issues over the previous 90 days--but that was little changed from the level of the past several months. The same monthly survey also found the first up-tick in confidence by small-business owners since last July.

Inflation
While falling real estate markets and rising inflation are likely to provide the mood music well into 2008, inflation is the more serious concern for small business.

The Federal Reserve's favored inflation measure--core inflation, which excludes volatile energy and food prices--is already too high for its comfort and is forecast to hit 2% to 2.2% this year. Headline inflation is forecast to hit 3.5% for the full year.

At some point, the Fed will switch its focus from forestalling recession to reining in inflation and mopping up the emergency liquidity it has injected since last summer. The Federal Funds rate, now at 3%, might dip another full percentage point before that happens. But long-term interest rates--which have more of an impact on the rates banks charge for small-business loans--will not fall nearly as much. PNC forecasts prime rates to average 5.4% for the year.

Energy and food prices are important to small businesses as well. Recent spikes in crude oil prices are now inflating transport and utility bills, while the sharp rise in agricultural commodities is working through the food-industry supply chain. Sadly, the tight balance between global supply and demand for oil shows little sign of easing this year; thus, prospects are dim prospects for energy prices receding anytime soon.

The U.S. Dollar
The further weakening of the dollar is one reason commodities of all stripes have risen in price. The brighter side of that coin for export-related businesses is that their products become more competitively priced in overseas markets, where growth is still robust.

Exports will likely be the driving force of the recovery in the second half of 2008. For many entrepreneurs, export markets will be the new frontier

Where Is The U.S. Economy Going? - Forbes.com