Tuesday, November 17, 2009

The Internet recession

I like the analogy that rather than a V, L or W shaped recovery we might be facing a WWW recovery (or retreat - chose your poison) or an Internet recession.

We plowed trillions into bailouts and stimulus and the results were expected to produce 3-4% growth in the third quarter and stronger growth beyond that. Well, those in the know have started backing off those predictions (a couple of Wall Street firms have starting edging expectations down to 3% for the 3rd quarter).

The Fed's Dallas president yesterday seemed to hint that 2.5% might be the new goal for 3rd quarter growth. That's far below our long-term growth rate and below the threshold needed to create new jobs. This creates two questions:

Do we need a larger, more aggressive stimulus plan?


Do we hit the brakes and try to gain some fiscal restraint?

I'm not sure which we're leaning. There are plenty of powerful voices on both sides of the argument, but it should be interesting to watch. If I were a betting man, I'd guess that we're going to get religion on spending and start making hard cuts in 2010 so the Democrats can run on a deficit hawk platform. This would like firm up the dollar and whack the stock market.

Wow, I would have loved to have been in on this auction.

"Nearly 35 years after taxpayers spent $55.7 million building the Pontiac Silverdome and a year after a $20 million sale fell through, city officials have sold the arena once called the most desirable property in Oakland County.

The price: $583,000."

"The 80,300-seat stadium opened in 1975 and has largely remained empty since the Detroit Lions left for Ford Field in 2002. The sale included 127 adjacent acres."

Wow, I knew times were tough in Detroit, but $583k for the Silverdome? There are condos in Clayton priced almost that high.


1 comment:

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