Honest View

From Tech Ticker:

“[Scott] Bleier argues that there was no recovery in the first place to “dip” from. “When we function based on what the market is doing, the market dictates our economic mood,” says Bleier. “The stock market dictates consumer spending, the stock market dictates where economists come on TV and say where the markets are going.” If it is time to “get real” as Bleier says, what needs to be done? He says we have to address what got us into this crisis in the first place, which is a nation overly leveraged in the real estate market. Banks are brimming with toxic assets, and until those are completely written off — not “papered over” — the U.S. won’t see a recovery, he believes. Another reality check: Near 0% interest rates are destroying and “stealing” the wealth of this county, Bleier says. “We cannot pay the bills because a lot of the bills are paid with the interest [of investments]. We are eating the principal going on two years now.” As long as we live in a credit-contracting environment, Bleier says the wealth of our nation is at risk. “The fixing is going to be a process, but if you start it, the market will then look past all of the anxiety as we go through it,” he says.

Eating the principle. That’s been my wonder recently. All that interest people used to earn — gone.

He adds a solution:

One thought on “Honest View

  1. Yes, the markets must clear, this is what’s getting in the way. Kick the banks jam-packed with bad debt through out the world in the teeth, kick global public pensions filled to the gills with overtime-gamed comp in the pants, and kick the zealots in govt (big guns AND big butter) who are over-budget and behind schedule out. Once the dead weight of past offenses are cleared out, the recovery could take place.

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