Some analysts not confident in rallyMore reading for the weekend -
"Four Good Reasons Not to Trust Today's Rally"
Article found here: https://www.cnbc.com/id/48013560
Excerpt:
...with wealth shrinking and public debt expanding, the calculus becomes even trickier. Homeowners in the U.S., for instance, have lost $6.7 trillion in property valuesince the fourth quarter of 2007 while shrinking debt only by $900 billion, according to an analysis Friday from Nomura Securities economists David Resler and Ellen Zentner.
"Household net worth will not return to its pre-crisis peak until late 2014," the Nomura report said. "Part of any recovery in net worth will likely require a substantial further reduction in household debt and we believe that the imperative to pare that debt further is likely to continue limiting the growth in spending by the household sector."
In short: One day's headlines will not cure years' worth of economic damage inflicted by soaring global debt.
"The debt-financed real estate bubble has left a legacy of balance-sheet constrained economic growth," Resler and Zentner said. "As Reinhart and Rogoff have observed, the eventual recovery to more normal conditions following similar financial crises can be measured in years if not decades."
Excerpt:
...more than 46 million Americans are on food stamps — better than 15 percent of the population — reflecting a 27 percent drop in net worth between 2001 and 2010, according to recent Federal Reserve data.