This month there is some good news and some bad news. First, the good news: there is only a month or two left of really bad stock market crashes. Next, the bad news: the same as the good news.
President Obama has been saying it's going to get worse before it gets better. The next two months should look pretty bad for the global economy. More people will lose jobs, more banks will be on the edge of failing, etc. However, just when it looks like there will never be an end to all of the bad news, in just a few months from now, things will start to stabilize. It won't be the end of the economic downturn, that is still a few years away (according to the cycles we follow). However, it will mean a reprieve for a bit, perhaps six months, or even more. An upturn in the collective mood would be rather refreshing. I sure would love a surge of good news for a change.
Below is an except from this month's MoodCompass:
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February 2009 – Can’t We All Just Get Along?
Last month was rather interesting. There were so many puzzle pieces that looked so bad at a time that seemed like everyone should be celebrating – the drop in optimism and associated stock market downturn, U.S. Treasuries being sold off even though the stock market was declining, and an increase in anti-U.S. sentiment after a new, fairly popular president was supposed to take office. We were right on with the pieces of the puzzle. There was an actual 5% drop in the stock market on Inauguration Day itself. China, Pakistan, and the Arab world as a whole were less than pleased with the United States the very week the new president took office. However, as a whole, things were more or less “normal.” We must admit that we too were caught up in the expectations that a new president would mean that at least the mood should get better for a moment, and were concerned about what seemed to be a discrepancy. The new president is for the most part doing exactly what he said he would do, what the majority of Americans elected him for, yet the U.S. (and global) collective mood continues to sour.
In February, there are more reminders that things continue to be all too normal. Mid-month the stock market begins to crash (again!). The U.S. government is perceived to be disorganized, incompetent, and fragmented. With this configuration, it is likely that internal fighting and self-interest will impede agreements on any proposed solutions to the economic crisis (which should appear to be getting completely out of control). Whether or not they can get it together next month, we’ll have to see. Regardless, don’t look for any improvements in the economic outlook before spring! This next couple of months of stock market losses might be considered a grand finale of the “show” we have been watching since late 2007. During this period there is a heightened risk of social instability throughout the world, meaning a higher than normal likelihood of demonstrations, riots, and geopolitical escalation.
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http://anewstory.org/markets/Feb09_MoodCompass.pdf (current issue viewable by subscription only; reprinted with permission of A New Story Foundation)