Has anyone notice that the long expected post debt-ceiling deal rally, has been undercut by the dismal manufacturing report released this morning. Hibay Yousuf of CNN Money, writes Stocks: Manufacturing data erases debt deal rally.
The unrelenting series of recent negative economic data seems to be validating the views of Robert Reich, Paul Krugman, Joseph Stiglitz, and Basset HoundDog, that our economy is being held down by a demand crisis, and that unless we find a way to reverse these large and damaging cuts in government spending, we may soon face further economic erosion, leading to a debilitating, double dip recession, or what Krugman calls, a "lessor recession."
NEW YORK (CNNMoney) -- Stocks erased a brief rally and turned sharply lower Monday, after a weak manufacturing report resurfaced concerns about a slowing economy.
The Dow Jones industrial average (INDU) tumbled 88 points, or 0.7%, after being up as much as 139 points, or 1.1%, earlier in the session.
The S&P 500 (SPX) slid 13 points, or 1%; and the Nasdaq composite (COMP) lost 31 points, or 1.1%.
"We keep seeing data that shows the economy is getting worse," said Kim Caughey Forrest, senior equity analyst at Fort Pitt Capital Group. "Earlier this year, we thought the economy would improve -- albeit gradually. But all the negative surprises are concerning investors." ... Deal or no deal. Economy still stinks.
So instead of a big rally, the stock market is actually down so far for the day. Now, is as good a time as any to start educating Washington politicians, the voters, and especially the TeaBaggers, about the realities of our perilous economic condition, and the damage a large, and protracted contraction of Government spending will do to our situation.
Here's a review of the bad economic news.
Last Friday's second-quarter GDP report in particular served as a stark reminder that the economy is growing at a sluggish 1.3% pace.
The gloom continued into Monday, with a report that showed that the manufacturing sector nearly stood still in July. The Institute for Supply Management's manufacturing index slid to 50.9 in July -- much worse than the 54 that economists were expecting, and down from 55.3 in June.
Stocks posted their worst weekly performance in more than a year last week, losing $700 billion in market capitalization.
And, we still have the prospect of a down grading of our debt, hanging over us, despite this recent deal. Without revenue enhancements, the markets are still going to be nervous about our political capacity to manage our economic policy in rational ways.
What we need is a good old fashion Keynesian stimulus. Now, is a good time to start of advocate for us now that we have this debt-ceiling silliness behind us.
This needs to be theme of the 2012 elections, that we need to rid the House and Senate of these negativist, ignorant, obstructionist, ideological extremists Teabaggers and other GOP, so we can get economically enlightened Democrats back into the House so we can reverse these damaging anti-Keynesian fiscal depressors on our economy.
I have another article I will post soon, called "10 Signs We Are Already In a Double Dipper Recession."
1:15 PM PT: Closing Bell From CNN Financial
1:45 PM PT: Roger Fox brings us this from BEA
http://www.bea.gov/...
1:54 PM PT: BilllaurelMD cuts right to the key point.
if someone would make the point
that demand is not going to increase without jobs, and jobs in the PRIVATE sector aren't going to increase without demand, maybe we'd stand a chance of making a claim that government spending is required. I'd even say we should give it a shot. But getting this bunch to listen, including the POTUS, seems to be a tall order.