Skeptical of Recovery

I admit it. My brain hurts. The financial/economic world isn’t making a whole lot of sense to me right now. Current consensus is that the worst is over, “green shoots” are taking root, and that growth is just around the corner. The stock market goes up on news deemed “less bad” and interest rates have also risen based on the idea that inflation will return with growth- how can it not return with all the stimulus and liquidity put into the system? Yet somehow I can’t help but remain skeptical of this growth story.

Gustav and economic recovery

Sitting comfortably at home this weekend, we couldn't help but notice hurricane Gustav head directly towards New Orleans.  As I write, Gustav is expected to make landfall as a Cat 4 'cane- not a wimpy breeze indeed.  New Orleans hasn't quite rebuilt adequately, although this storm will certainly test reconstruction efforts.  In the comments to Holy GDP, we started to discuss how unforseen events can impact the economy and markets in unanticipated ways.