There Is No Recovery - Yet

The President is cautiously pleased with what now has become the famous "3.6% GDP" line. Claiming the stimulus is working and that "there's more to be done" (really?), the Commander-in-Chief was nonetheless taking credit for this short-term patch work success.

If you're semi-literate in examining GDP and other economic statistics, it's not hard to poke holes all over "Magic 3.6."

First off, the money supply has skyrocketed. 

"...As a result, the large pool of money will lower the value of the dollar, drive up inflation, and force suffocating taxes to pay for already unfunded public entitlements."

"...It’s either print more money or hike up taxes to pay for the drastic budget shortfalls, and right now the Fed and the Obama administration are choosing to print more money rather than risk complete voter meltdown over a skyrocketing in tax rates during a recession. This is what happens when you don’t exercise fiscal restraint, whether you’re a Democrat spending wildly or a Republican signing off on an ill-advised TARP bailout."

Second, while profits are up, revenues in companies trading on the major indices are generally down across the board. How can this be? Simple. Companies cut pay roll and fired workers. Thus, unemployment dancing around 10%. Third, they're using bail out cash not to create jobs over the long term but to survive in the near term. In the case of the banks, they're not even lending the money back to people in the form of business loans.

Last, the economy shrank back in February by 6.2%. That's minus 6.2.  3.6 doesn't even cover that.

The bulk of the 3.6% (around 2%) (although penned by the hand of a socialist author this is a nice summary. The conclusions are up for debate) is rooted in consumer spending created by government programs like 'Cash for clunkers' (which did give a boost to the car industry which means it hit the private sector) and home buyers plans that helped housing starts. Now. Not to completely make mockery of the 3.6%, there's a method to the government's madness. They're basically hoping this will spurn consumer confidence. Or to those who believe it's all the fault of the other guy, Obama's achievements are significant.

As long as the money supply continues to rise (which in itself is a complicated issue), unemployment remains high and revenues fall, there's no recovery. What you're seeing are a series of "dead-cat bounces" or shots of steroids administered into the market. 

Hey, it's a start.

Time will tell but for now, best to remain extremely sober.