Elliott Wave InternationalmyEWISocioniomics.Net
Home > U.S. Economy

Faster "Economic Reversal" than 2008?
Signs that the economic downturn is speeding up

By Bob Stokes
Fri, 09 Sep 2011 14:45:00 ET
Add to Facebook Add to Twitter Email to a friend Printer Friendly

It's sobering to think that the economy today could deteriorate even more swiftly than it did in 2008.
 
Yet there's evidence which points in that direction.
 
Consumer confidence is falling fast, for example. The August Consumer Sentiment Index fell to its second lowest figure in over 30 years. And even before that figure published, the August Financial Forecast warned subscribers to expect the consumer confidence downtrend to continue:
 
"The consumer accounts for the bulk of buying in the U.S. economy...the University of Michigan Consumer Sentiment Index, which is similar to the Conference Board’s Consumer Confidence Index...are locked in downtrends and carry the same bearish implications."
 
Consumers are cash-strapped and confidence is low. That's not a promising combination for the economy in the months ahead.
 
Another disturbing fact is that what little growth the U.S. economy does have comes mainly from Uncle Sam. And as we know, the government does a poor job of sustaining such growth. Any real recovery must come from the private sector, yet the private sector's contribution to the GDP topped four years ago. This is also from the August Financial Forecast:
 
"...GDP growth is mainly reliant on government spending...private sector GDP topped in 2007, right along with the all-time peak in the Dow Jones Industrial Average. Only government spending has increased."
 
Please see the chart below:
 
 
 
Federal stimulus has not restored health to the economy. And there's no reason to believe that yet another round of government action will do so either. 

There's yet another indicator that our economic deterioration might very well accelerate more rapidly than what happened in 2008.

You can see this indicator for yourself, in the chart on page 8 of the September Financial Forecast. It shows a "drop-off" so steep that "economists should start abandoning their theories about a 'soft patch.'" See this chart in moments by following this link>> 

Rating: - based on [42 rating(s)]
Rate this content:
  
 


FFS"The clarity of your thoughts is so powerful that I typically read an issue at least a half dozen times." - R.N., Financial Forecast subscriber

The Elliott Wave Financial Forecast is a rational voice in a volatile marketplace with an unrivaled record of providing tomorrow's news today.

It helps you take control of your investments and anticipate the larger trends that most investors don’t recognize until it's too late.

Preview the latest Financial Forecast now>>

Free 50-Page eBook


Learn to Think Independently

The Independent Investor eBook can help you to challenge conventional notions about investing and explain market behaviors that most people consider "inexplicable."
Download your free Independent Investor eBook


© 2014 Elliott Wave International

The Elliott Wave Principle is a detailed description of how financial markets behave. The description reveals that mass psychology swings from pessimism to optimism and back in a natural sequence, creating specific Elliott wave patterns in price movements. Each pattern has implications regarding the position of the market within its overall progression, past, present and future. The purpose of Elliott Wave International’s market-oriented publications is to outline the progress of markets in terms of the Wave Principle and to educate interested parties in the successful application of the Wave Principle. While a course of conduct regarding investments can be formulated from such application of the Wave Principle, at no time will Elliott Wave International make specific recommendations for any specific person, and at no time may a reader, caller or viewer be justified in inferring that any such advice is intended. Investing carries risk of losses, and trading futures or options is especially risky because these instruments are highly leveraged, and traders can lose more than their initial margin funds. Information provided by Elliott Wave International is expressed in good faith, but it is not guaranteed. The market service that never makes mistakes does not exist. Long-term success trading or investing in the markets demands recognition of the fact that error and uncertainty are part of any effort to assess future probabilities. Please ask your broker or your advisor to explain all risks to you before making any trading and investing decisions.