Larry Kudlow has it right:
Business-Power Neglect
Stimulus hasn't created jobs. Businesses aren't hiring. Banks aren't lending, which has kept inflation low at the expense of business growth. Congress is gridlocked and awaiting November like tourists on the beaches of the Florida panhandle. And consumers are getting tired. Meanwhile, tax increases are looming next year. And state and local government workers are facing the cold reality that they too may join the unemployment line.
The only way out of this mess is to offer REAL incentives for businesses to hire and allow them to write off capital investments more quickly and take an axe to government spending as Reagan did in the 80s. Drastic action is needed now, but it won't be coming.
Bunker down for a volatile earnings season. There's certain to be some disappointments and cautious outlooks for the remainder of the year. The question is what degree this has been baked into the market. I'm waiting for earnings forecasts to come down again before investing more, which could take us to near 1000 on the S&P.
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