Wednesday, April 29, 2009

Corporate Sector Says No Green Shoot

Green Shooters are Betting the Corporate Sector is Wrong

"The real change in private inventories subtracted 2.79 percentage points from the first-quarter"
"Real nonresidential fixed investment decreased 37.9 percent in the first quarter, compared with a
decrease of 21.7 percent in the fourth"

Business spending and inventories are tanking, it seems that the corporate sector is skeptical of any increase in demand so they are resetting to a new 'lower' level of activity and inventories. The market seems excited about consumer spending being up, this was lead by 'Personal Taxes' being down increasing disposable income, likely as a result of the stimulus package. The savings rate still rose even though spending was up(outlays rose less than the income increase), which shows cautious consumers as well. All categories of investment fell, animal spirits haven't been fixed yet the green shooters seem to think so

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