Which economy grew?
By Daniel at 28 October, 2009, 3:51 pm
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“Real” and “Paper” Are Different Worlds
Let’s break down the insight in market model terms.
To begin, when it comes to trading and investing, there is the “real” economy and the “paper” economy. The real economy represents what is really and truly happening – the cut and thrust of Main Street, of jobs and wages, of boots on the ground and day-to-day life. The paper economy, in contrast, tracks what’s happening on Wall Street (as reflected in equities, bonds, commodities and currencies).
One can break out the two as follows:
Key Drivers for the “Real” Economy
# Jobs, Wages and Unemployment
# Debt Loads/Balance Sheet QualityKey
# Trade Balances
# Main Street (small business and consumers)
# Realistic Long-Term Outlook
# Negative Government Impact
Drivers for the “Paper” Economy
# Liquidity Levels
# Investor sentiment
# The “Expectations Game”
# Wall Street (megabanks, connected interests)
# Idealized Short-Term Outlook
# Positive Government Impact
http://www.taipanpublishinggroup.com/taipan-daily-102809.html
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Ben (the recession is over) Bernanke lives in the paper world. So does Geithner and many others in Washington. They wouldn’t know the real economy if it bit them.
Written by JanPaul
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