The US economy is poised to have a good year in 2012. As I have mentioned before business owners and managers have been working hard to overcome the current economic slump. Over the last few years industries have cut capacity, laid off workers and generally contracted plus we are beginning the fourth year of extraordinarily easy money. It is beginning to pay off. The people who are still in business are there for a reason; they have adapted to the changing economic realities and found a way to continue. Washington and the economic press have not figured this out yet; I believe the markets have, judging by recent behavior.
Everyone expects too much from the announcement at the end of the Euro zone meeting on Friday. There is no way these expectations can be met. The euro zone has serious issues that will take time and effort to solve. The world is looking for some sign that there is a plan or a way forward that can address these issues that is acceptable to the various countries, a very tall order.
Why would anyone put any faith in anything Standard & Poor’s says? S&P was one of the major reasons for the economic meltdown in 2008. They failed at every level. Now in an effort to prove relevance they are firing away at every credit in the world including sovereign debt. They are acting like they have some credibility about financial matters. In the mortgage scandal S&P was motivated by money and nothing else, now they are desperate to stay in the game, the business press is acting like there is a reason to listen to them this time. What’s next Alan Greenspan for head of the FED? Caveat emptor concerning the rating agencies.
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