Hows the economy doing?

[NJ5]

@akuma587:

True, higher interest rates mean it becomes more attractive to invest in those. But those rates are the result of supply and demand. If rates go up it means supply is too high or demand is too low.

In essence, it means it's more expensive for people and the government to get money, which isn't good in a recession and may cause more foreclosures and the like. The whole point of solving the credit crunch was to make it easier to borrow money.

If you check out articles like this one, it's pretty obvious that these high rates are not desired by the central banks.

As for your #2 point, can an economy recover if the stock market is depressed and no one is buying anything?  Investment in the stock market may not be sufficient for an economic recovery, but it is necessary.

That's precisely my point... it's not sufficient. It's nice that the stock market is going up, but it's a pretty minor thing.

And as for your #3 point, it sort of contradicts your other points.  According to some people's theory, the government's intervention into the market will be extremely harmful in the long run.  Assuming that premise, aren't you criticizing the government for not intervening into the banking sector enough?

I'm not saying the government didn't intervene enough. I'm also not saying it invervened too much.

I'm saying the banks look under capitalized, which follows from the fact that their capital levels were defined from too optimistic assumptions which have already been broken. Note the word government doesn't even appear in this statement.

I'm not here to be ideological, I just want to discuss a few separate facts without regard to the philosophy behind these decisions.