“The Stock Market Economy” and 10 reasons to be pessimistic
That’s what Forbes’ columnist Robert Lenzner calls it, and he gives 10 reasons why its near to long term future looks bleak.
1. Economic growth in the US unlikely to pass 2% for the next 3 to 5 years — and maybe even up to 10 years. There can be no stimulus program in light of the expected Republican victory in November. “This is going to be a period of pain,” said Joseph Stiglitz, Columbia University professor. ….
2. QE2 or Quantitative Easing, the expectation of pouring another trillion dollars into the banking system is seen likely to only trigger inflation, but create no new jobs. ….
3. Expect a new bubble in sovereign debt. ….
4. Large corporations are only part of private sector benefiting from cutting overhead (reducing employee count) and bringing more revenues to bottom line.
5. The Fed will be sitting on its $2 trillion in cash for a long time without any practical use for it. There is very little demand for bank loans from the private sector. Adding reserves to the banks wont accomplish any more economic activity.
6. The economics profession let the world down because it had the tools that were politically acceptable.
7. No solution in sight for the housing market. ….
8. The shadow banking system [is] trying to escape from the regulators. ….
9. China and India are graduating 7 times more engineers a year than the U.S.
10. We are papering over the structural problems in finance with bubbles.
Read full article at http://www.huffingtonpost.com/robert-lenzner/the-ten-most-serious-prob_b_774482.html