Wall Street Baffled by Slowing Economy, Low Yields

[briann]

To me, none of this is baffling, and the worst is surely yet to come.  I have no respect for most economists who said there was going to be a Real Estate recovery.

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http://www.cnbc.com/id/43236764


Wall Street is having a hard time figuring out what to do now that the U.S. economy appears to be sputtering and yields are so low, Peter Yastrow, market strategist for Yastrow Origer, told CNBC.

"What we’ve got right now is almost near panic going on with money managers and people who are responsible for money," he said. "They can not find a yield and you just don’t want to be putting your money into commodities or things that are punts that might work out or they might not depending on what happens with the economy.

"We need to find real yield and real returns on these assets. You see bad data, you see Treasurys rally, you see all bonds and all fixed-income rally and then the people who are betting against the U.S. economy start getting bearish on stocks. That’s a huge mistake."

Stocks extended losses after the manufacturing fell below expectations in May and the private sector added only 38,000 jobs during the month.

"Interest rates are amazingly low and that, thanks to Ben Bernanke, is driving everything," Yastrow said. "We’re on the verge of a great, great depression. The [Federal Reserve] knows it.

"We have many, many homeowners that are totally underwater here and cannot get out from under. The technology frontier is limited right now. We definitely have an innovation slowdown and the economy’s gonna suffer."

However, he said he wouldn’t sell stocks.

"Any bears out there better be careful because the dividend yields on these stocks look awesome relative to all the other investment vehicles out there," Yastrow said. "So bears are going to have to find a new way to express their discontent with the U.S. economy."

[KansasJew]

Relying on a central banking system is what killed the economy whom forced us into a fist/credit based economy.

[KansasJew]

Fiatt had to add an extra t.

[Zelhar]

I am afraid the worst is yet to come. Obama is running an annual deficit of 1.5 trillion dollars, a new record. there is no bail out, yet still the deficit is at its all time high and comparable to the level of bankrupt Greece.  The Federal Reserve is printing money like crazy. I think it buys 3/4 of all the new debt issued by the government. This is like some freak animal feeding on its own excrement.

[briann]

I am afraid the worst is yet to come. Obama is running an annual deficit of 1.5 trillion dollars, a new record. there is no bail out, yet still the deficit is at its all time high and comparable to the level of bankrupt Greece.  The Federal Reserve is printing money like crazy. I think it buys 3/4 of all the new debt issued by the government. This is like some freak animal feeding on its own excrement.

Its really a perfect storm.
1)  A huge housing bubble that is nowhere finished bursting
2)  A fed that will not stop printing money
3)  A deficit worse than any other non-wartime in our history thanks to ridiculous spending
4)  Entitlements that will be impossible to pay in the upcoming decades

We could be in this 'soft spot' for decades

[Zelhar]

Briann do you know why the deficit for 2011 is so large even though tax revenue increased and there is no more Tarp and bailout ?

[briann]

Briann do you know why the deficit for 2011 is so large even though tax revenue increased and there is no more Tarp and bailout ?

The tax revenue increased compared with 2010, but it was still very low, thanks to the stagnant economy.  Also, there is a record low number of people who are NOT paying taxes, again, mostly because of the economy.

As far as the bailout, you are right TARP expenditures are down, but, a lot of the bailout isnt even part of the deficit. The Fannie and Freddie bailout is NOT part of the defecit, and if it were, it would add $100 billion last year.

Also, many parts of the stimulus are continuing even now.... just like with the 'New Deal' which was spent over several years.

Also,  Medicare and Social Security are continuing to grow.