Most Wall Street Banks will be reporting in green for last quarter only because speculation and insider trading has lifted the stock markets to artificial highs. If you calculated the stocks and derivatives at an average price of last 3 quarters, they will end up in red.
Why the recovery isn't actually as impressive as finance experts says, Lets investigate:
1. The manufacturing sectors came out from their previous loss making time, only by slashing workforce and reducing prices. The retail segment is doing the same. This means consumer has less amount to spend (rather the theory of Americans have started saving huge amount in their socks or under their pillow).
2. So the so called "Recovered Economy" has a far less consumer base to start with. With job losses continuing and people who are without a job for 12 months no longer counted on neither as Jobless nor as Employed, there is no immediate chance of major expansion in that base. The consumer confidence data and retail sales figure shows that.
3. Banks have become smarter since Enron, they don't cook up their books directly, instead they influence market to inflate their asset class. In old days, doing this in stock market could have landed one jail for Insider Trading.
Be careful and take Analysts upgrade news with a pinch of salt. Recovery is on, but only for the super-rich ( The too big to fail category), too bad if you are not in it.
Read roubini's warning on Next Bubble at http://www.rgemonitor.com/roubini-monitor/257791/
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