New York, NY (PRWEB) February 4, 2009
In today's issue of Profit Confidential, a widely-read market and investment newsletter, financial expert George Leong warned readers that the Obama economic stimulus plan will not be effective at countering the most serious threat to the U.S. economy: rapidly rising unemployment.
In his report released today, Leong wrote, "Earnings continue to be weak, jobs are being axed by the tens of thousands a day, and the economy looks like it is being flushed down the toilet. There is little positive news in the market. "
Leong does not believe that the economic stimulus plan before Congress will be effective at reversing the steady loss of American jobs. "Now there is rising debate on the details of President Obama's economic stimulus plan, which was approved by the House last week, yet not even one Republican voted for the plan. The debate concerns the lack of creation of jobs in the plan. The continued loss of jobs is worrisome, and I expect the trend will continue, as companies slash payroll costs in-line with slower revenues." Leong continues, saying, "The problem is that lost jobs impact consumer confidence and spending. People are saving more than in the last two decades and this is clearly not the objective of the economic stimulus programs. As I have said, unless the velocity of spending rises, the stimulus dollars may have minimal impact."
In an article appearing in today's Profit Confidential e-letter, Leong outlines some of the reasons that the dismal jobs forecast is unlikely to soon reverse itself, even with the economic stimulus. "On the earnings front, the fourth-quarter earnings have been largely weak, which is nothing unexpected. There have been few positive surprises. Companies have reduced guidance going forward or have not offered guidance due to the economic uncertainties and the length and depth of the global recession." He adds, "Consumer confidence fell to its lowest level on record, which is expected given the loss of wealth in the housing and stock markets. The housing market continues to be distressed, with an 18.2% decline in home prices in November." In conclusion, Leong notes, "As I have been saying, the U.S. and global economies are in deep trouble. I do not expect a significant and sustainable rebound at this time given the high market risk."
For the full report, please visit: http://www.profitconfidential.com
About Lombardi Financial and Profit Confidential:
Profit Confidential is Lombardi Financial's free daily investment and market e-letter. Written by financial gurus with over 100 years of combined investing experience, Profit Confidential analyzes and comments on the actions of the stock market, precious metals, interest rates, real estate, other investments and the economy. Lombardi Financial is a division of Lombardi Publishing Corporation, one of the world's largest newsletter companies, now with over one million customers in 141 countries.
For more information, visit: http://www.profitconfidential.com