For GE, the world is not enough

No. One bad quarter for GE makes for one bad day for the DOW. The “R” word now is “Recovery”. Will be several more billions in bad paper that the big financials will need to write down, but by the time any of the major economic wogs admits we are in a recession – it will already be over. We will have “inflated” our way past the day of reckoning as we go into “Sudden Meltdown” overtime.

Yes, it seems to me that the GE earnings news is like the last straw that broke the camel’s back. With their report showing how the financials debacle has come home to put a hurt on resources and infrastructure types of equities (something one hoped would not be the case) then we now find ourselves facing a depression similar to the inflationary depression curtailed (but not entirely stopped) by Paul Volcker in 1982 and when unemployment rose to 10+%. After getting us thru that mess, he was astute enough to leave and give the Fed over to the “Greenspan”. You can draw your own conclusions as to his performance, however, we are again finding ourselves facing another inflationary depression. Thanks to the eloquent, laudatory and liberal policies by the present Fed & Treasury to avoid a realistic painful capitalistic depression bro’t on by the overly avid unselfpoliced financials banking and mortgage industry, we are being inundated with enough electronic and paper money to provide the basis for an exceedingly large inflation rate eventually in the next couple of years, i.e. 2010-2015. Because of this, it now may well be the time to sell out of the domestic equity markets into safer havens such as tax frees, CDs, money markets, treasuries, etc. to save for future reentry when market prices become more depressed. Since inflation can be expected to rear its ugly head plentifully in the future, and the markets will always seek and reach a proper relative value to the perceived values in inflated currencies, then you can be assured that we will see them return at some future date. Note that the prices of most things particularly such as gold, etc. is roughly correlating for us their values in relation to currency values. As for now, it might be better to get onto the sidelines, let the bloodletting continue, eventually abate, and then astutely wait for the next buy-in opportunity next year or so. I no longer believe (as has been recently proposed in the economic media) that we are in for a recovery in the latter half of 2008 given that there is certainly more bad news to come! What I believe is most intriguing about all of this mess is that it may not be attributetable to the fault of the president or congress in what the outcome was ultimately to be, just as the depression of ‘29-30s wasn’t attributable to Hoover, although one could say the Taft-Smoot trade act by congress may have exacerbated the world wide influence of our self induce domestic depression. Ride the wave. The US economy will perservere and this will all be over in time.

Looks like Mr. La Monica is back on the recession bandwagon. What a difference a week makes, huh?

Stop being a Doom & Gloom Cheerleader, Paul. First quarter earnings were expected to be dismal but outside of financials, Q2 should bring better earnings.

Let me remind everyone, before the “R” word starts getting tossed around that by definition, a recession is TWO consecutive quarters of negative economic growth.

We haven’t officially had ONE, yet.

So knock it off.