I have been watching for this one. Retail inventories. In the second quarter some were proclaiming "pent up demand" as inventories dropped. Then it was noted that sales dropped faster than inventories leaving much work on reduction to be done.

With a slight rise in demand and further inventory declines now inventories are approaching the more typical ratio to sales. That is still true after excluding the autos and the clunker program.

Either a rise in demand or a further drop in inventory will force greater purchasing and production. A return to growth.

Inventories drop at record pace in August

Retail auto inventories slashed by 7.9% on clunker sales

By Rex Nutting, MarketWatch
WASHINGTON (MarketWatch) - U.S. businesses reduced their inventories at the fastest pace on record in August even as sales marched higher, the Commerce Department reported Wednesday.

Paced by a large draw-down in autos, business inventories fell 1.5%, matching the largest percentage decline ever recorded in the 17-year history of the data. Inventories also fell 1.5% in December 2008 and in October 2001.

It was the 12th consecutive month of falling inventories.
---

The inventory-to-sales ratio fell to 1.33 in August from 1.36 in July, an indication that businesses are making significant progress in reducing the overstocks that have hampered the economy for the past year. The inventory-to-sales ratio averaged about 1.28 before the recession.

Once businesses reduce their inventories to desired levels, any increase in sales will have to come from new production, which would boost both U.S. job growth and imports

Inventories; Another block in the foundation is falling in to place

Apple Sales Top Estimates on Demand for Mac, IPhone

Oct. 19 (Bloomberg) -- Apple Inc.’s sales and profit beat analysts’ estimates on back-to-school demand for iPhones, iPods and Macintosh computers, sending the stock in after-market trading to its highest price in history.

Fourth-quarter net income rose to $1.67 billion, or $1.82 a share, from $1.14 billion, or $1.26, a year earlier, Apple said today in a statement. Sales advanced to $9.87 billion in the period, which ended Sept. 26. Analysts surveyed by Bloomberg had estimated sales of $9.22 billion and profit of $1.43 a share.

Apple has defied investors’ concern that the economic slowdown would stifle demand -- sales and profit topped analysts’ estimates in each of the previous three quarters. The company started selling the iPhone 3GS in June, spurring orders. Chief Executive Officer Steve Jobs also cut iPod prices, added new models and ran a back-to-school Mac promotion.

“They are really executing exceptionally well in a difficult economic environment,” Ryan Jacob, portfolio manager of Jacob Internet Fund, said in an interview from Los Angeles.

http://www.bloomberg.com/apps/...087&sid=aIGxHLoY861k

Texas Instruments Forecast Exceed Analysts’ Estimates

Oct. 19 (Bloomberg) -- Texas Instruments Inc., the second- largest U.S. chipmaker, forecast fourth-quarter profit and sales that beat analysts’ estimates, indicating demand for electronic components is recovering further.

Earnings will be 42 cents to 50 cents a share this quarter on sales of $2.78 billion to $3.02 billion, the Dallas-based company said today in a statement. Analysts predicted profit of 40 cents a share on revenue of $2.79 billion, based on the average of estimates compiled by Bloomberg.

Some semiconductor companies including Intel Corp., the world’s biggest, have posted forecasts that indicated demand is returning to levels reached prior to the fourth quarter of last year, when the worldwide economic crisis took hold. Last month Texas Instruments raised its forecasts on recovering demand for so-called analog chips -- semiconductors used in devices such as cars, computer disk drives and consumer electronics.
---

Third-Quarter Results

“Our customers are winding down their inventory corrections and have begun to increase production levels in their factories,” Chief Executive Officer Rich Templeton said in the statement.

http://www.bloomberg.com/apps/...087&sid=alhp_E85V.ms

I don't want to side-track your posts with things that aren't scientific or relevant and for which I have no hard data....But there is a housing market out there also.

Let's just call this anecdotal and from the street.

We have two homes and need to sell one because our income is not what we had planned, even conservatively. We have talked to realtors in Frogville and Atlanta. We are anxious but not desperate or panicked.

The Atlanta realtor has sold about two dozen condominiums in our complex over the years. I first talked to him last year. From the get-go he has been very discouraging....negative....negative.....negative. Reality is one thing but going around with a black cloud when you don't even KNOW the forecast is unnecessary.

Recently he sold my next door neighbor's unit in two weeks! And for far less than the price he quoted me in the spring for my own unit. I've been watching the market in our complex and the prices have dropped significantly. However, units are now selling and within a week or two! They are selling because people are literally giving them away. Of course the comparables directly impact the value of my unit.


My neighbor said "Well, with the market as it is we had no choice." These people could have waited it out. They had no mortgage. They already own a retirement home in SC. It's important to remember that even in a good market, ninety days from listing to sale is about right if the property is priced right. They took a low offer in less than ten days on the market.

I said nothing to my neighbor but I know as a realtor if things are selling that fast in the current market or in any market it's because you aren't asking enough. I'm sick to death of hearing how awful real estate is. Obviously there are qualified buyers out there or the units wouldn't be moving at all.

The television advertising that comes on late-night TV advertising properties paints a bleak scenario and lists hundreds of thousands of homes below "appraisal." Just call a special number and register for the list, etc..... Come on.

Realtors in Frogville tell us that properties are selling here. Most sellers are retirees and not strapped but that doesn't stop buyers from coming to town and making absurd offers for half the asking price.

IMHO, this smacks of the blockbusting of the fifties and sixties, which was a psychological game....realtors profiting from an atmosphere of panic....if not hysteria.

Of course there has been a "correction." That's not unusual in real estate. But there are buyers out there with purchasing power. Yes it's a buyers market but I don't think it's the fire sale (at least in North Georgia)....that is oft-portrayed.

Peachy

Peachy, I study the real estate market in Colorado, very carefully and I've come to the same conclusions you have. There is a market out there and it's moving. Just now the "bottom feeders" are in my area of Colorado and when they finish purchasing all of the repos, I'm sure the market will have a favorable "correction".

quote:

Originally posted by Koka:
Peachy, I study the real estate market in Colorado, very carefully and I've come to the same conclusions you have. There is a market out there and it's moving. Just now the "bottom feeders" are in my area of Colorado and when they finish purchasing all of the repos, I'm sure the market will have a favorable "correction".

I'm in partial agreement with you Koka but I think there is more going on, at least here in North Georgia. There are not only the bottom feeders but the sellers who are being panicked into selling their homes short to legitimate buyers - at least it seems that way in my neighborhood. My condo complex must be owner-occupied according to the by-laws so there can be no speculators. AND if that is the case (people wanting to sit on vacant properties which is pretty stupid IMO, even now), then they must be figuring they are getting the property way under market.

OTOH, I have two relatives in Florida trying to sell and their market is completely dead.

Peachy

Hi Peach,

Comments are always welcome.

I don't intend any thread to be just technical. My intent was to provide a missing viewpoint as some are wanting to promote economic failure for political reasons.

Housing is almost a separate topic though. Despite being integral to the current collapse it does operate by it's own mechanisms some. With the current recession it is rather complex because a number of related things all occurred to create this perfect storm. One bubble was built on the other.

Then again, it is a major leg of support, or lack there of, for this economy.

Generally speaking, barring some moral or ethical considerations, anything of value will sell if the price is right.

One motivation for sales at this very moment is that the $8,000 first time home buyers tax credit is due to expire next month. Extending that is still in question. But sales need to go through soon to get it as it now stands.

Home prices and mortgages are once again low enough to entice renters. Their trouble is qualifying of course.

For your owners that want to sell price may not be much of a consideration if you think about it. As long they are not underwater they may be able to trade up. Selling a condo down 20% in Atlanta and buying a condo on the beach in Miami that is down 60% from the highs could be wash. They might even trade up for the same money. So saying their motivation is panic may not be true at all.

That is far different if they took their equity out and spent it on a $15,000 large screen plasma TV and home theater, new car or paying off years of spending on the credit card.

It is the difference between seeing a home as an investment or a home. If a "home" there not a lot of problem as long as all the homes are rising and falling somewhat at the same rate. But we know many spent the equity that now doesn't exist. That is the real problem that will take time to work out. A lot of time. And more time with the economy down as well.

And while many declared the home market stabilizing with a recent small month rise in prices there is still more trouble ahead. The Alt-A's are still a big problem and some worse than the subprimes. Alt-A's were not only ARMs but also "pick a payment" which can be as low as interest only or negative amort.. So they think while subprime rates doubled payments some of the Alt-A's will triple them when they reset with higher loan values accrued.

Those replaced the Subprime loans and most banks won't issue them now. And they are starting to reset currently. "It's not a coming problem, it is here". Resets will peak late next year.

While foreclosures recently hit a new record high, that was predicted. We had a moratorium on foreclosures for four months at the beginning of the year so they are playing some catch up.

Homes: About to get much cheaper - CNNMoney.com

I can sympathize some with your situation. I don't know when we will try to market this place again. At least all the developement permits are in place for at least 4 years and may be extended. But I will be sogging through another cold wet winter. My feet will be cold and damp instead of filtering warm sand between my toes. For how long I don't know.

And since the value of this place is much greater for development, when and if they are developing, the "house for house" approach doesn't work for me. Plus Hawaii prices are only starting to come down a little now. But they are also impacted by Japanese buyers that buy for investment or vacation homes maintaining prices unrelated to the US economy.

Bull,

You’re whistling past the graveyard with your inventory theory.
What about all the businesses and service companies that don’t carry inventory??
This recession is far from over, as nothing has been done to move it in the right direction.

If you want an indicator to watch that will tell you when we are turning the corner, watch fast-food and restaurant advertising. When they stop advertising “price” and start advertising “product” it’s all up hill from there.

IMO As yet there are NO indicators that indicated this recession is anywhere near over.

Pawn

PS Stop listening to all those talking heads and do your own due diligence, if you want to make money.

quote:

Bull,

You’re whistling past the graveyard with your inventory theory.

Not a chance. It's not a "theory" it a "measure of fact". Plus, I am not "whistling" about this economy.

When you have building inventories and falling demand the economy is likely contracting and heading in to a recession.

When, like the second quarter, you have falling inventories but demand falling faster it was wrong then to say the falling inventories was a positive as I noted. If inventories didn't fall as fast as demand, and they didn't, then that is really more of an inventory build with more contraction to come.

Recently reported was a very slight uptick in demand while inventories fell. That starts to set the stage for a recovery. First, inventories must come in to line with current demand to stop the contraction. Then with any uptick in demand it will result in inventories needing to be grown which eventually will promote demand and the recovery will be in place.

quote:

This recession is far from over, as nothing has been done to move it in the right direction.

Draconian efforts are being made to mitigate this recession and it does seem to be working. First the self perpetuating downward spiral needed to be broken and it appears that is happening.

The economy was not estimated to fall this fast when the stimulus was designed last year and the early part of this year. It is a two year plan. It was know the infrastructure spending would take at least 6 months to get the money to start flowing even with "shovel ready" projects. This was known and told to us.

At this point, now the six months has passed I think we have the best possible stimulus plan in place. The effects should start to show soon. The greater effect likely in the spring. But I think everything is falling in to place.

If they had known how fast this economy was collapsing should it have been more front loaded? And would they have wanted that? Certainly. But we make the best moves on the information we have at any one time. And remember there was a lot of opposition to the stimulus. Some saying it wasn't needed. And some are still saying it now.

Odd though, that those that opposed taking ANY action are the same ones complaining that not enough is or was being done. Go figure.

quote:

IMO As yet there are NO indicators that indicated this recession is anywhere near over.

Pawn

Ya got more than a little strawman there Pawnie. No where did I proclaim the recession is over or claim we are in a recovery. I even object to what they will call the "end" of the recession. IMO that only means we hit and are at bottom. That is not the same as recovering in my mind.

That is why I choose "indications" instead of "signs of" a recovery. Some things must be in place for a recovery to happen. And one of those is inventories and production falling to the point it meets current demand. Then we can have a recovery later when the demand increases.

Another would be job losses ending. Sure, falling from 600k a month in losses to only 250k is improvement in rate but still in the wrong direction. I am of two minds on that statistic since you can only lay somebody off once without rehiring. So losses are losses and they will naturally fall slow over time. It is when employment levels off or turns positive that is most important.

quote:

If you want an indicator to watch that will tell you when we are turning the corner, watch fast-food and restaurant advertising. When they stop advertising “price” and start advertising “product” it’s all up hill from there.

Fast food? A lame indicator from where I stand. They always advertise price. "Value meals" have been around a very long time. And I think we will be a recovery a long time before we see anything close to the type of blatant consumerism we had only a couple of years ago. Consumers were spending a lot more money than they had and taking on debt. I think they will recover last and most slowly.

The consumer will return to more spending. I just doubt the levels can return to where they were under the current and future conditions, if ever. The fundamentals don't support it.

quote:

PS Stop listening to all those talking heads and do your own due diligence, if you want to make money.

I am better than the talking heads. Financially I have almost never been wrong, ever. "Early" on a couple of moves, but not wrong.

I only use the heads for information. I have written what you could call "articles" on how to use them properly.

As to "make money" I am suffering an embarrassment of riches and have never done better in my life. I know few that ever have done so well. I missed the entire bear and risked my entire net worth at the time on the upside, including an in and out trade last Nov to Dec. that was very successful. I have made "life changing" amounts of money this year.

I hope that does not disappoint you.

The Europeans seem to continue in denial about their economies. I am not sure why. I recall a year or so ago (two?) when the German Finance minister declared "No recession for Germany!" almost on the same day their recession became official with the second quarter of contraction. Now I read this today:

quote:

U.K. Recession Probably Ended in Third Quarter, Survey Shows
By Jennifer Ryan

Oct. 23 (Bloomberg) -- The U.K. economy probably grew for the first time in more than a year in the third quarter as a pickup in manufacturing and service industries ended the worst recession since World War II, a survey showed.

http://www.bloomberg.com/apps/...087&sid=aOT10AMC_15U

Then the actual report comes out and:

quote:

U.K. Economy Unexpectedly Shrinks in Longest Slump on Record
By Jennifer Ryan

Oct. 23 (Bloomberg) -- U.K. gross domestic product unexpectedly dropped in the third quarter as enduring slumps in services, manufacturing and construction kept the economy mired in its longest recession on record.

Gross domestic product dropped 0.4 percent from the previous three months, the Office for National Statistics said today in London. Economists predicted a 0.2 percent increase, according to the median of 33 forecasts in a Bloomberg News survey. The economy has now contracted in six quarters, the most since records began in 1955.

http://www.bloomberg.com/apps/...087&sid=ahAA.kZx86eQ

Same writer on the same day too. What is up with that?

It looks like what the Bush Administration used to do. They would put out selective positive facts with positive spin right before the real or new figures come out that showed things deteriorating.

Bull,
Re:

quote:

Fast food? A lame indicator from where I stand. They always advertise price. "Value meals" have been around a very long time.

FYI, fast-food and restaurants have been used as an economic indicator for as long as I can remember because it is the most direct and immediate indication of spending of the middle class. Food is the one commodity people can not and will not do without.
Think about it!
The poor and the elderly are most likely on a fixed income regardless of economic conditions and they will not be required to change their eating habits. Whereas the middle class’s income will change due to economic conditions, forcing them to change their eating habits, therefore they will eat out less, which is reflected in monthly sales figures of fast-food and restaurants .

Re:

quote:

Value meals

????
That is a product, NOT a price advertisement.
Here are a few “price” advertisements I have seen recently.
Chicken sticks for $.25 each (McDonalds ? )
Large pizza with two toppings for only $5.99 ( Chi Chi’s ?)
Steak dinner for two for only $10.99 ( Applebee’s ? )

When you see advertisements like those, with a dollar amount, you can rest assured they are trying to generate cash flow to pay vendors who have put them on a net 15 days instead of the normal net 30 days.
They are simply trying to stay afloat during hard economic times.

FYI, there are several small franchisees who are in danger of going under. Be careful if you invest in food stocks.

Re:

quote:

I hope that does not disappoint you.

Not at all! I wish you and every other capitalist entrepreneur all my best.
Pawn

quote:

Recovery Indications

10.2% unemployment?

quote:

Originally posted by Florida Righty:

quote:

Recovery Indications

10.2% unemployment?

Nope, that wouldn't be one. Falling claims would be though.

Are Republicans backwards on everything?

GREAT NEWS!

quote:

Fewer home mortgages are under water as values stabilize

Lita Epstein
Nov 9th 2009 at 10:10AM

The percentage of Americans owning homes that are under water is falling, according to Zillow's third-quarter Real Estate Market Reports, which focus on 156 metropolitan areas. The other good news is that home values were relatively flat between the second and third quarters, so the price declines may be over for most homeowners.

Zillow found that 21% of homeowners with single-family homes were underwater on their mortgages at the end of the third quarter, down from 23% in the previous quarter. Two factors play into the drop. One is that many under water homeowners have already lost their homes to foreclosure. The second is that home values have stabilized in some areas of country and have even started going back up in other areas.

Source

I am thrilled. This is one of the turning points I was waiting to see for many reasons. Once prices stabilize the extent of the problem with mortgages and banks becomes clear. That also means CDOs can be honestly valued and may help them start trading and selling again. That will promote lending. Currently fears still has those assets priced well below their long term value.

Homeowners that see a even a slight rise (happening even in Florida, one of the worst states for the bubble) means they are more likely to pay on a mortgage that is underwater rather then let it go to foreclosure fearing further losses. The latter should result in a big shift in sentiment and behavior. That will effect inventory of homes for sale as well.

Second, despite some of the decline is coming from foreclosures that still means the problem is being cleaned up, not getting worse. As banks replace bad underwater mortgages with good ones, take the losses, the banks become more secure. It means bailing out the banks worked and will become healthy as they make more in operating profits than they need to take in future losses.

This was I predicted although it really could be the only way it would work out, eventually imo. What was in question was the extent of the damage that would result.

If this one quarter of good news continues then this is a substantial turning point.

Bull,

As I said previously “You’re whistling past the graveyard”

If my memory serves me correctly both you and I are old enough to remember the Jimmy Carter recession and that took over 4 years to pass, and he was actually trying to do something about it.
Whereas no one is trying to do anything about this one. And as a matter of fact, everything that has been done in the last 2 years, has only served to compound the problems they were suppose to solve.
FYI, we still have a long hard row to hoe, my old friend.


What one thing has Pres. Obama and the Democratic controlled congress done that has had a positive impact on the economy? ( Just one, the most important, please.)
Pawn

According to the Pew Report California is not the only state in deep financial trouble.
Seán

quote:

Originally posted by BullDoug:

quote:

Originally posted by Florida Righty:

quote:

Recovery Indications

10.2% unemployment?

Nope, that wouldn't be one. Falling claims would be though.

Are Republicans backwards on everything?

Some are predicting it will climb to 13%.

quote:

Originally posted by Florida Righty:

quote:

Originally posted by BullDoug:

quote:

Originally posted by Florida Righty:

quote:

Recovery Indications

10.2% unemployment?

Nope, that wouldn't be one. Falling claims would be though.

Are Republicans backwards on everything?

Some are predicting it will climb to 13%.

That sure would make more obvious how WRONG you and the Repubes were to fight and reduce the stimulus then. That was real stupid, eh Frighty?

Now you want a jobs program that your people said they didn't want?

quote:

Bull,

As I said previously “You’re whistling past the graveyard”

I think not in the least. I try to be very realistic when it comes to money. As I said previously, the topic is "Indications" of a recovery. I haven't made any declarations.

The economy is undoubtably improving some as most of the downdraft is petering out. But I take that with a grain of salt as well. For example, eventually layoffs had to decline because you can only lay off somebody once without hiring.

What I am looking for with these "Recovery Indications" are signs of bottoming or improvements. There are some improvements in places. Stabilizing home prices would be a major one. But "in places" doesn't make an entire economy.

quote:

If my memory serves me correctly both you and I are old enough to remember the Jimmy Carter recession and that took over 4 years to pass, and he was actually trying to do something about it.
Whereas no one is trying to do anything about this one. And as a matter of fact, everything that has been done in the last 2 years, has only served to compound the problems they were suppose to solve.
FYI, we still have a long hard row to hoe, my old friend.

In no way have I said "Good times are here again".

Average time for the stock market to hit new highs after a recession is 3 years, 3 months AFTER the recession ends. But in recent times most are less, two years or less. Most of those recessions weren't nearly as bad. And recovery after a financial system crisis are said to take longer. Plus I don't know if that average includes the Great Depression that would enlarge that time frame.

So based on simply historical cases we may be a bit ahead of ourselves in the market.

quote:

What one thing has Pres. Obama and the Democratic controlled congress done that has had a positive impact on the economy? ( Just one, the most important, please.)
Pawn

They have done so much that is positive to blunt and reverse the Republican destruction of our economy I couldn't pick just one.

Don't forget that much of the stimulus is just starting to kick in. And with winter taking hold the infrastructure work is ramping up for the spring. We were told this time frame is how it would play out. You shouldn't let your politics distort your opinions about known facts.

quote:

Originally posted by Sean:
According to the Pew Report California is not the only state in deep financial trouble.
Seán

Sean,

Each state is different and I argue against their rather low rating for Washington. We have no income tax so our main tax base is sales tax. We are used to seeing it tumble in recessions. This is known to us. We also maintain a "rainy day fund" for such times which is being used to balance our budget. Also they list our "increase" in unemployment which was very high but until recently we had one of the lower unemployments in the nation and are still below the national average. And my county includes Seattle through which something like 80% of the dollars flow, most populous in the state, and the employment rate was very low until recently.

I don't feel we have anything close to the kind of trouble that California, or even Oregon has.

One big difference would be in the last election the voters here rejected an initiative limiting spending and limiting taxes. Earlier this year California rejected the tax increases needed to balance their budget.

F R,
Re:

quote:

Some are predicting it will climb to 13%.

By when?

As we have it, before this Pres’s 4 years are over unenployment will be over 15% and may even reach 18%.


Bull,
Re:

quote:

quote:
What one thing has Pres. Obama and the Democratic controlled congress done that has had a positive impact on the economy? ( Just one, the most important, please.)
Pawn

They have done so much that is positive to blunt and reverse the Republican destruction of our economy I couldn't pick just one.

Would you like a little music to do that dance to!

Give me some “ known facts “ please.
Q. In exactly what year(s) did the Republicans do all this destruction?
Who was President and which party controlled the house and Senate in those year(s)?

Re:

quote:

You shouldn't let your politics distort your opinions about known facts.

I haven’t had that problem for over 50 years, how about you? And before you answer know this: Although I don’t post on the “News” board, I do read it!!

Now here are some well known facts for you.
It is impossible to invest and make money without taking politics into consideration. As a matter of fact it is the very first thing you should take into consideration to map your strategy.
For example:
If we have a:
Democrat Pres and a Democrat controlled congress ( the party of tax and spend )
Or a
Republican Pres and a Republican controlled congress ( the party of lower taxes and smaller government )
Or any mix of both parties as Pres and/or congress
all require a different strategy if you are going to make money.
Then you must enter into your strategy the psychological demographics of the American voter and non-voters.

Once you have all that figured out you should be able to figure out where every US penny will be spent and be able to invest accordingly.
Pawn

quote:

I have made "life changing" amounts of money this year.

I hope that does not disappoint you.

If those "amounts of money" are dollars, and not invested in something of enduring value or sound prospects (dollars are neither), then I hope you are braced for disappointment in the relatively near term.

quote:

Recently reported was a very slight uptick in demand while inventories fell. That starts to set the stage for a recovery. First, inventories must come in to line with current demand to stop the contraction. Then with any uptick in demand it will result in inventories needing to be grown which eventually will promote demand and the recovery will be in place.

Doug, that is a very succinct and completely accurate description of a free marketplace. Prices (the mechanism of economic activity) set by supply and demand (the aggregates of production and consumption) will trigger recovery. Permitting prices, supply, and demand to seek their equilibrium levels is the only thing that can do that.

Good job. There's hope.

Doug & AMProf,

In theory you both are correct but you are over looking one very important fact.
And that is that the “slight uptick in demand “ was only created by the government, not the consumer and therefore it will only be a one time “tick” without further/continuous government intervention with taxpayer’s money.
The CONSUMER did not demand a new car, the government simply gave them one!
The CONSUMER did not demand the banks or auto makers be bailed out, the government did it on their own.
The CONSUMER did not demand a tax credit if they bought a new home, the government simply gave them the tax credit.
The CONSUMER ( those on SS and the poor ) did not demand cash from the government, the government simply gave it to them.
So where is the “DEMAND” in your equation coming from?

As I said before, nothing has been done to correct the problems that got us into this recession, therefore we will remain in recession until something is done to correct the problems.

What you must ask yourself is : What got us into this recession? And what has been/should be done that will/has correct those problems?
The answer to the first question is “ government spending and government regulations (bigger government)”. And the answer to the second question so far is” NOTHING”, absolutely nothing.

Simply put, if nothing is changed that caused the problem, the same problems will persist.
Pawn

Doug's not even right in theory. His observations about supply and demand were only accidentally close to reality. He would never admit that government spending and regulation are a problem, much less the problem. He thinks further government actions will help the economy recover, and that there is too little, not too much regulation (read interference) in markets.

You misunderstand me if you see any similarity between my view on such matters and Doug's. They could not be further apart.