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    Obama’s Great Experiment Is Ending Badly

    Obama’s Great Experiment Is Ending Badly

    The great experiment devised by the most brilliant mind ever to occupy the Oval Office, the massive expansion of government and the piling on of debt and regulations, is not working:

    U.S. companies hired far fewer workers than expected in May and output in the manufacturing sector slowed to its lowest level since 2009, raising concerns that the U.S. recovery is running out of steam.

    Economists slashed their forecasts for Friday’s closely watched U.S. payrolls report after private-sector job growth tumbled to just 38,000, its lowest level in eight months.

    Who could have imagined such a thing?  Only those who lack gravitas, apparently.

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    Who could have imagined such a thing? Any person who has ANY understanding of the fallacy that is Keynesian economics and who understands that "Static Analysis" of economic theory doesn't EVER work (because people change behaviors based on the new changed circumstances).

    I've been sitting back watching commodity prices be decoupled from the demand curve and just waiting for the market to correct again. Right now, the ENTIRE manufacturing sector is being squeezed because their raw materials prices are going through the roof, while their customers have finished replacing the inventory burned through during the past 18 months, so customers are no longer ordering, waiting for Manufacturers to reduce their prices because those manufacturers are hungry to try to get work.

    If you want to look at history, I'd say we're JUST about to enter a cycle (at least for manufacturing) like the one started around March of 2001, when the manufacturing downturn. My guess is that any manufacturer who remembers history will level off production and start cutting back so that they are in a lean inventory position, with minimal funds tied up in inventory which might not sell for a while.

    This has implications for the Obama re-election though, because it takes about 20 months to recognize a downturn, meaning that the "experts" won't tell us we we're back in a recession until February of 2013, even if all us lay-folk know it before then.

    P.s- if you want to see how TRULY bad it became from the uncertainty created by the policies of the Democrat controlled Congress, take a look at the THIRD graph and NINTH graph to see how Democrat changes in policy starting in 2007 crashed the economy almost exactly 1 year later and took almost a year to bottom out as businesses and individuals changed their structures and finances to deal with said uncertainty (specifically tax policy, health care policy, foreign policy and domestic spending).

    viator | June 1, 2011 at 4:19 pm

    The Dow Jones Industrial Average plunged almost 280 points

    "Stocks sank more than 2 percent Wednesday, following several economic reports that confirmed a struggling recovery and after Moody's downgraded Greece's bond ratings deeper into junk status."


    viator | June 1, 2011 at 4:46 pm

    Greece, with the substantial downgrade including a negative outlook today by Moody's, is very near default.

    FT, Alphaville

    If (and IMO when) Greece defaults and triggers CDS (Credit Default Swaps) fasten your seat belts.

    It is worse than it appears.

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