The 4th quarter: more “bad weather”

A common excuse on Wall Street made by company management when their earnings disappoint is the weather.  You hear it time hurricaneafter time offered up on conference calls to explain why the number came in a few pennies below the consensus estimate.  The truth is there is always some abnormal occurrence in the world that can be used to deflect criticism of poor performance.  Good companies don’t make these excuses.  They tell the truth, take their lumps, and lay out their vision for the future.  In the end, these companies have more credibility with the Street.

I chuckled to myself when I heard the White House explain away the contraction of the U.S. economy last quarter as due to the effects of Hurricane Sandy.

The truth is, the U.S. economy shrank last quarter.  That is not a good thing.  One more down quarter like that and we will officially be in a recession.  Yes there were cuts in defense.  But there are larger cuts to come here as well as in other domestic programs.  The sequester is right around the corner and the talk in D.C. is that it’s going to happen.  We also raised taxes at the turn of the new year and we haven’t seen the effects of this yet.

Europe is still mired in a debt crisis and a recession of their own. China growth is slowing as their primary markets are soft. These facts will put further pressure on our economy.

I have never in my lifetime seen an administration that refuses to take responsibility for its own actions and policies. It’s pathological, clinical. The basic fact here is that out of control government interference in the economy will dampen economic growth. Think about it.  Why would you hire anyone if you are a CEO or owner of a small business? You have no idea what your health care costs are going to be. You have no idea what your energy costs are going to be. You have no idea what your taxes are going to be. Government uncertainty and interference are strangling the economy.

They even found a way to blame today’s data on the GOP. We are four years into the Obama Administration! I believe that quote today was, “This was the best contraction we have ever seen.” Sounds like, “I was for it before I voted against it.”  Or,“Depends what the meaning of is, is.”

My goodness, who are these people?

Rick Santelli is right.  Wednesday, he said we are now just like Europe. We have slow growth, high government spending and debt, and high unemployment.

L. Todd Wood is a contributor to The Brenner Brief. Twitter: @LToddWood

L. Todd Wood is a contributor to The Brenner Brief. Twitter: @LToddWood

Our openly political Federal Reserve is trying as hard as it can pushing on a string to lower unemployment.  But, no one is dealing with nor will they acknowledge the real issue – government induced uncertainty.

The MSM crowed today about how much of a shock this slowdown was. They have been trying as hard as they can to push the narrative that the economy is recovering.

What are they going to say next quarter?

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