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Enjoy the last days of summer and the Labor Day holiday because there is "abundant cause for concern," says Charles Ortel, managing director of Newport Value Partners, an independent research firm.
A self-described optimist, Ortel nevertheless says the "worst of all worlds" is coming, characterized by falling asset prices and higher taxes, accompanied by a rising cost of core goods and services. Echoing the "stagflation" of the 1970s, he has coined the term "skew-flation" to describe what's ahead.
As to growing consensus the global economy is on the mend, Ortel believes both government "macro" data and corporate "micro" data are painting a much rosier picture vs. actual reality. The real macro story, he says, is there's too much productive capacity around the world and not enough demand. At the same time, private sector incomes are down while debt levels are up.
"We are still in the middle of systemic shock" and emergency government programs have temporarily kept the global economy on "life support," he says. "We think governments have little additional room left to continue to postpone the restructuring that's necessary around the world."
Originally posted by Tentickles
"We are still in the middle of systemic shock" and emergency government programs have temporarily kept the global economy on "life support," he says. "We think governments have little additional room left to continue to postpone the restructuring that's necessary around the world."
BIDEN AND THE STIMULUS: "Vice President Joe Biden will claim Thursday that the $787 billion stimulus plan "is doing more, faster, more efficiently, and more effectively than we had hoped," reports McClatchy Newspapers' Steven Thomma.
"In a speech planned to mark the 200-day mark since the American Recovery and Reinvestment Act took effect, Biden will say that $62.5 billion in tax cuts have been delivered, $1.9 billion contracts have been awarded to small businesses, and more than 10,000 transportation projects approved.
"In many areas, he'll say that work has exceeded goals: Work has started on 2,200 highway projects, for example, 700 more than the expected at this stage; Work's also started on 192 airport projects, 94 more than scheduled; Health care centers in all 50 states are providing expanded health care to 500,000 patients, 200,000 more than forecast.