We are getting too damned Old!

The poor hedge fund managers need sympathy, as their $1.9 trillion bet against the market did not show a Profit in January. It appears that math models only work well when the Markets are ascending, where slow-moving Stocks can be immediately replaced by quicker Stocks; the trouble coming in that the faster moving Stocks are heading downward. Old Operators on Wall Street could explain this is the traditional bent in the Markets: they either move too slow to define a Trend, or they move too rapidly to take advantage of the Swing. I once tried to explain to an Individual that hedge funds were like flipping a Coin; the Odds would eventually even out. He did not wish to listen to me at the time, as I sounded somewhat too convincing.

The White House agrees with me on the proposition that there will be no Recession this year. The only real difference is that I actually believe it, while they don’t. The rationales behind Recessions have being altering from the traditional causation through the last several Recessionary periods. The old-style models do not encompass or explain the modern expanded economies. The Housing sector does not play a significant Determinant under the force of a programmed 401k system. Loss of funds from bad Mortgages is systematically replaced by a flow of funds coming to escape Taxes by Tax-allowed investments working with the Mortgage Tax Credit. The consistent flow of Money not only buoys the Markets, but bring the exchange Credit to fuel Production even when the Retail segment cash flow shrinks; i.e., Business can avoid constriction through Recapitalization and potential expansion into new Retail outlets. I believe that there will be zero Growth over the year, but doubt there will be little Contraction.

What I believe will happen this Year can be explained as Business will firm out their foundations by keying in Production and Distribution to maintain a consistent flow of Product. This entails not only Streamlining, but also expansion into new markets for their Product. It is a Question of Retail and Distribution catching up with advanced Production. It will be exploratory Marketing, though it should be successful, even if it holds little expansionary capacity. I believe that the American economy will find it much easier to accept zero Growth by the end of the Year because of this flow, a telling element due to the lack of Production expansion potential in the American economy; the American economy constrained by high Resource Costs, and an Ageing Consumption population as well as an Ageing labor force. lgl