Economists: Their Worst-kept Secret For This Economy

medianet_width = “336”; medianet_height = “280”; medianet_crid = “200463464”; medianet_versionId = “3111299”; Obama will ask Congress for billions in new dollars to boost the economy. He wants to cut taxes and increase infrastructure spending. The story then said the President will also ask Congress for more than the original $1.5 trillion in proposed long-term U.S. deficit cuts. I don’t understand it. How can you increase spending to boost the economy, lower taxes, and reduce the deficit all at the same time? But then again, I’m not a politician. Where the Market Stands; Where it’s Headed: Some facts for my readers… Last week, the S&P 500 capped off its biggest four-week loss since March of 2009. We all know what happened after March 2009; stocks went up 100%. The S&P 500 closed last week at a price/earnings multiple of 12.2, the lowest since March of 2009. We all know what happened after March 2009, stocks went up 100%. Bets by investors in hedge funds that bet against the stock market are now at their highest level since July 2009. Dear reader, I am long-term bearish on America. Yes, I believe we have yet to see the worst of the bear market that started in late 2007. But the environment today is one of extreme negativity, extreme bearishness. Stocks do not traditionally go in the direction people think they are headed. Over 90% of investors were scared out of their wits in March of 2009-and stocks went the other way. There is too much consensus on the stock market having thrown in the towel for 2011. Name me one analyst claiming the Dow Jones will surpass its May 2, 2011, high of 12,876. There are none. The bear market rally that started in March of 2009 remains intact. I believe we will see higher stock prices again before the markets test their March 2009 lows. What He Said: “The U.S. reduced interest rates in 2004 to their lowest level in 46 years. And what did Americans do with their access to easy money? They borrowed and borrowed some more, investing the borrowed money into real estate. Looking ahead, perhaps the Fed’s actions (of bringing interest rates so low as to entice consumers to borrow more than they can afford) will one day be regarded as one of the most costly errors committed by it or any other banking system in the last 75 years.” Michael Lombardi in PROFIT CONFIDENTIAL, July 21, 2005. Long before anyone was thinking of a banking crisis, Michael was warning that the coming real estate market bust would create havoc with the banking system. Retire on This One Hot Stock! This stock is up 232% since we first picked it. Our expert analysts say it will go up another 100% in the next 12 months! Our top 19 stock picks were up an average of 173.57% in 2010 (not a misprint). See where we are making money in 2011 and get our combined 100 years of investing experience working for you starting today.]]>

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