Economy Watch -- What's Right with This Picture?

There was big news on Friday. News that was a shock to us all. News that changes paradigms, mind sets, and bottom lines. News that assaults our notion of "what's going on 'round here." This news had nothing to do with Scooter Libby or the bloodsport that politics has become. This news was so good, that I could find almost no mention of it in the Sunday version of the New York Times, and it generated only a brief mention in my local paper. This "good news" that the media chose to ignore was that in spite of the hurricanes, the US economy grew at an inflation-adjusted rate of 3.8% for the third quarter. Remarkably, this was a higher rate of growth than the previous quarter's 3.3%. Pardon me, but I thought Katrina et al, were sending us into certain recession. Isn't that what the "Main Stream Media" told us; isn't that what the headlines in your local paper said? There is something else the MSM is not reporting: strong corporate profit growth of nearly 13% vs. a year ago. The odd thing about this is one of the few industries that is in a recession is the media business. Newspaper circulation is plummeting, network television viewership is collapsing, and movie theatre box office receipts are trending lower. Maybe that is the reason the media in this country are so disconnected from reality in their reporting, they are depressed from observing their own fate. This is the opposite of the orchestra playing waltzes as the Titanic sank. The MSM are like the choir singing dirges on Easter morning. Stay tuned, I'll keep you informed about the true state of the economy and profits. There are lots of economic releases coming. We expect some softening, but, as we said in our recent quarterly letter, the downtick will be followed by a big uptick as the rebuilding of the damaged areas reaches full speed.