Ruminations going forward...

That's what my old high school etymology teacher would call a $1.25 word! And what if it was -- what would that get you? I mean, the devaluing of the dollar that is going on troubling, although not entirely unforeseeable. But a weak dollar (while helping export sales) has serious consequences, notably it reflects a weak economy, less purchasing power abroad, companies on-sale to the rest of the world, potential inflation scares, greater deficits, and a general distrust of American economy as the stable leader and force that has always made it #1 in people's minds for financial freedom/prosperity/leadership.

What else... how about the fact that the government was a large purchaser of government-issued debt (you know, the treasuries that we are issuing to raise money for the 800 billion dollar stimulus). Well, the government is going to back of these purchases in the next month or so as well as other purchases designed to keep interest rates low. So, it looks like the 5% 30-year mortgage rates that have been as crucial as the first time home buyer tax credit to stabilize housing are the best case scenario for the future.

Consumers -- looks like consumer spending has stabilized and that job losses are stabilizing. That's good from the standpoint of now we know what we're dealing with but that also means that THIS is what we're dealing with -- companies reporting revenue down 18% from a year ago; and unlike years past, revenue growth for future quarters isn't going to happen very strongly. What we have today is going to be the type of spending we'll have the next year or two. That means that companies are not hiring anytime soon; they're profitable due to cost-cutting and they won't add employee costs until revenue finally picks up.

But just when you think -- ok ok, so we have the "new normal" and we'll generate some healthy, furtile soil of stagnant growth for a few years and then return to strong growth in 2011 or 2012 -- well its at that time that we see that the government doesn't plan to leave things be and let them play out. No - its going to add MAJOR MAJOR changes (markets don't like unpredictable things at all). We're talking MAJOR cost implications via healthcare reform and possibly carbon emissions reform. If they don't happen - great, 2 years of stagnant growth. If they do, fine, the economy and people will adjust, but it will hamper growth (the personal and societal question is whether those goals are worth the cost, literally).

Oh and finally -- consider the MAJOR wildcare that could (unlikely, but COULD) lead us to a double dip recession -- strong increases in commodity prices while the economy stagnates. Well, Oil is above $80 now and $100 would be severely detrimental. Again, the pesky dollar decline only plays into the rise in commodity prices.