Summer of Recovery?

Jobless rates rose. Less people are at work, so they have less money to spend, and this impacts the bottom line for businesses. Not too many companies are going to be doing very well for a little while. Yet the government talks about summer of recovery.

But economic numbers are not the reasons why stocks are selling off. They always find a reason to explain why stocks go down or go up. News does not drive the stock market:

http://www.tradingstocks.net/html/news_does_not_move_stocks.html

Everyday there are good news and there are bad news. Media chooses the headline based on how the stock market reacts. Earnings does not rive the stocks. Good earnings appear at the top. Earnings decline AFTER the market declines. Here is the chart of earnings versus stock prices:

http://www.tradingstocks.net/html/earnings_does_not_drive_stocks.html

Social mood drives the markets. A bull market is the result of optimistic social mood. A bear market comes when the social mood declines. Social mood directs the markets, economy, politics and the culture. When pessimism as seen in these forums takes hold, markets decline first, and the economy suffers later.

http://www.tradingstocks.net/html/socionomics.html

Our economic problems are not about what we are doing today. It is about what we have already done. Economy is not a machine that you can oil and grease and fine tune to run at a certain pace. Due to earlier optimism, entire population has already borrowed all they can for decades. Money supply was inflated with borrowed money. Prices and salaries were inflated with borrowed money. What we borrowed is our money supply. Banks create money when we borrow:

http://www.tradingstocks.net/html/banks_create_money.html

When entire money supply has interest to pay, it creates an impossible situation where some of the borrowers are guaranteed to go bankrupt.