The prominent economist, who essentially precited the global recession, Nouriel Roubini, sees high risk that there could be a W-shaped recession.

I believe he is being too optimistic and I have fair reasoning to slightly disagree with his analysis that the economy experienced a recovery. Mr. Roubini is concerned that the high debt levels, especially by the American federal government, is at a high risk of having a W-shaped recession, which would mean that the economy will peak, then go right back down again.

My argument is that we are seeing an artificial recovery. For example, unemployment and foreclosure filings continue to increase while cash is not as readily available as it was only a year ago. More importantly, the Dow Jones Industrials Average showed an increase of 50 percent in only five months, which is unprecedented. Only before and during Great Depression 1 did America see the Dow Jones Industrials Average increase the way it did recently.

Do not forget many companies shed much of their dividends from their common stock. Many companies also shed many of their core assets to stay in business.

Most people are not aware that only 30 components (companies) make up the Dow Jones Industrials Average. Five companies were replaced in less than two years for lack of performance (although the Dow Board claim there were other reasons), which has never happened in the history of the more than 100 years of that Dow's Index. The Board of the Dow Index commonly replaces companies that file bankruptcy or are ailing (like GM, AIG, Citigroup), but not in the likes of what has happened in the past two years. Therefore, Dow short-term is not a fair indicator of America's economy.

My argument, rather, is that the Dow Jones Industrials Average is a strong indicator of the volume of business the federal government is doing because the majority of the companies in the Dow are large contractors for the federal government. Examples include Intel, IBM, Microsoft, HP, GE, AT&T, CAT, Exxon, just to name a few.

Don't believe me? Go ahead and review your portfolio. Compare your stock portfolio to the Dow Jones Industrials Average as the benchmark. It is an unfair comparison today because you are not able to pull a company out of your portfolio to replace it with a healthy company while not being charged any money for the purchase of that healthy company. It is very difficult to keep up with the Dow right now because of the unfair advantage the Index has.

I am not making predictions, however I am making it clear what is truly happening right now while many people, especially liberals, ignore the facts.

America is depressed. We need Jesus Christ. We are ripe for His love and our repentance as a Nation. We cannot depend on the Federal Reserve. We cannot depend on bailouts because we the people made our voice heard and we the people continue to make our voice known.

For Mr. Roubini's article this week:
http://www.ft.com/cms/s/0/90227fdc-900d-11de-bc59-00144feabdc0.html

Video from 8/12/2009:
http://www.huffingtonpost.com/2009/08/12/roubini-taleb-talk-econom_n_257708.html?ref=patrick.net
###