UPS guidance, residential real estate price fall, rising bankruptcies – all point to a nasty recession – why is stock market so confident?
Alex Brown
Oct. 23, 2007

According to the shipment companies like UPS the holiday retail sales will be sluggish at best and maybe much worse.

The residential real estate markets are in free fall. The commercial real estate market is also in trouble.

The rate of mortgage defaults is skyrocketing. The bankruptcy rate has reached levels not seen since 1930s. People are liquidating their 401(k) and retirement funds to maintain their standard of living.

Car sales have plummeted. Low paying jobs are in plenty but that does not help pay mortgages. Large corporations keep firing people and export jobs to China and India while illegal immigrants and H1Bs depress wages artificially.

The mood in the main street is that of depression. People are spending because that has become the habit. But they are real nervous about the future especially the long term future.

Why is the stock market so silent? Normally the stock market is supposed to predict a recession well ahead of time. What happened this time.

The economy is divided between rich and the rest. The economic wealth is concentrated among a very small section of the population. This heavy weight families and individuals are controlling the show through Democratic and Republican politicians.

The market no longer represents the future. Because of special tax rate for capital gains and special treatment of dividends, the stock market is more like a convertible bond in the hands of a few wealthy people.

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