They Can't Handle the Truth!

[FoundingFathers]

That's what it comes down to - Earlier this week Maria and CNBC were constantly gushing about and continuously repeating some report from a
Dutch newspaper about John "the sun is always shining" Chambers. As reported by CNBC, the CEO of Cisco was quoted as saying that IT spending will start picking up in 2 to 4 months and will excellerate 4-6 months after that. WOW! Pretty good news coming from the CEO of the biggest seller of IT products in the world! Maria first released this 15 minutes before the market opened and CISCO went from 18.80 to 19.20 premarket - Nasdaq futures went from down 5 to up 5 and by the end of the same day ( as Maria reported this story an additional 6 times) the Nasdaq rose by over 1.5%!

Well, the story never really happened. According to CNN (see link on Depression2 TV "Cisco news never happened") the entire thing was taken out of context. Cisco also released a statement saying that Mr. Chambers never said this. Apparently what Mr. Chambers said was that
the current economic environment is still challenging ( remember, this coming from Mr. Sunshine). He went on to say that once the economy
bottoms (maybe next week, maybe next year) the IT market should start to pick up 2 to 4 months later. Well, Maria was close I guess.

The fact is that the bulls cannot fathom or accept the truth. The truth is that the economy will not recover. The truth is that we are in a K-winter - the truth is that unemployement will continue to worsen. The truth is that deflationary forces will not be denied ( and should have always been allowed to run it's course). The truth is that by fighting deflation we are just delaying the end game and magnifying it's pain.
The truth is that deflation plus debt equals Death. This is why they can't handle the truth - the truth is just too frightening - The truth is not the elephant in the room - it is the 3 ton Great White shark swimming with us (in our economic fish tank) that nobody want to admit exists! The fact of the matter is, to overcome our debts and liabilities the economy must grow at 5% or more for the next 7 years. With little pent up demand - that is economically impossible. The pent up demand has been all spent and is
clearly represented by that huge pile of debt sitting on the Government's, Corporate America's and American's balance sheet.

But as I said before - the mantra on Wall Street is "don't let the facts get in the way of a good recovery story".

[FoundingFathers]

I remember Nate33 (GE) used to post that in the 1960's for every dollar of debt we added to the economy we added $2 - $3 of GDP. Today for
every dollar added it equates to about 70cents in GDP. Think about that statistic - that sums up the deflationary spiral. It is literally financial quicksand - the move you fight it the deeper you sink.

Think of all the debt that has been added to this economy - where has it gone? New SUVs - a gigantic pile of consumer goods made in China -
new homes. Are any of these investments to encourage GDP growth here? SUVs and homes are certainly helpful - but we are at the peak of
those cycles with signs of coming down. Auto sales recently have been
flat to down WITH massive incentives. Homes sales also appear to be peaking - we have 110% capacity in construction jobs, developers, contractors and mortgage bankers. What happens when we go to 100%, or 90% or 80% - alot of people will either be out of work or watch their income fall dramatically ( just what has happened in the brokerage industry). The goods from China is helping fuel GDP growth
allright - GDP growth in China. How many people have taken on new debt to start a business or invent a new product? Very few I'm afraid -
the debt has mostly gone to satisfy a big pile of foreign made junk, an oversized gas guzzling car and a big home made of woodframe and drywall. This is not going to get us the future growth we need to grow
out of the debt.

[IrishGold]

You are absolutely right FF!
I have a sister-in-law and she & her husband just bought a $275,000 tract mansion in northwest Houston. The worst workmanship I have ever seen in a new house. In addition, she and he both have new big Jeep SUV's and the latest in a big screen surround sound entertainment center. They have no savings to speak of and the little they did have was sucked down over the last 2 years by the SM. So I say to them, "Why don't you guys get what little you have left and put it into a fund like the BearX. What do I hear as a response? "Well, I would hate to do that and miss out on the recovery!" I say "What recovery? Can't you see the damn train coming down the tracks at 90 miles an hour? Do you really think it can turn around and go the other way? It CAN'T people! Wake the F*** up! That train is about to do one of two things and neither one is good. We are getting ready to slam head first into a solid wall at full speed and there will be damn few survivors, or we are going over a cliff and there will be even fewer survivors." I have told them that I and my neighbors have provided for our immediate families and if they have not done anything in the way of preparation for the times ahead, do not try and come to me, crying for help. At that point in time it is too damn late." Can anyone guess what they did "in preparation"? They bought a 1 acre vacant lot about 5 miles from us, and went into debt another $60,000!
:confused: :rant: