This year could be the year that economic reality kicks in for the American economy...
As Krugman notes today the real estate market is out of touch with reality...and rates will focus their attention even more as the year goes on.
The so called "low unemployment" is really more likely to be caused people dropping out of the labor force...than it is people "getting jobs."
Indeed, hundreds will line up for a dozen Walmart-type jobs in most markets.
The bond market has been levitating...even while gold and oil remain high...
And major companies like Ford and GM...are a multiyear lows.
Then there is the possibility that the Democrats will take over part of Washington in the '06 elections coming up... And also the fear on the Street that the Republicans will "go populus" to gain votes this summer. Of course "Republican populism" is only lies and empty promises, but the public hasn't quite caught on yet...it seems.
Exactly how Wall Street avoids economic reality FOR THE WHOLE OF 2006 is problematic... This could be the year REALITY STRIKES.
