The weakness was broad-based. Spending on business equipment fell at a 3.1 percent annualized rate, while spending on structures sank 7.5 percent. Corporate earnings dropped almost 10 percent, while exports slipped 6 percent. Housing investment shrank 5 percent.
So how did the stock market react to this obviously disappointing news for the "real" economy? It made new all-time highs, of course.
In addition to unproductive factors such as higher taxes and doubling of medical costs under ObamaCare, businesses seem to have embarked on a merger mania and stock buybacks. Even the business world of investors is turning insane. DDD, the leading producer of 3D printing equipment has increased its sales by a whopping 45% YOY. Its price promptly fell, because it is spending its revenues on research and development.
POTUS Obama has yet to respond, but based on past action, we can predict what he will say:
1. He just found out from reading the paper;
2. He is concerned;
3. He will call an economy summit;
4. He will ask the Treasury to redouble its effort at increasing spending. Problem solved.
No comments:
Post a Comment