There’s a significant potential for some swings in stock prices this week (not that we haven’t seen them in the past!) because of the volume of economic news and the number of earnings reports due. The number that’s likely to be watched most closely is the 3Q GDP growth, which our model pegs at about 2.1% in annualized form. While very few now expect a double-dip recession, this number will be seen by the stock market as an indicator of likely near-term future economic health, and hedge funds will certainly short the market aggressively if it dips. I think it’s a bit of a tempest in a teapot over this one; whatever it is, it’s almost certainly better than 1Q and worse than 4Q so we’re slowly recovering.
The FCC is getting itself behind a wireless-based thrust at national broadband ills, but I don’t much like Genachowski’s style here. He opened a recent talk with comments about the slide in the US economic standing worldwide, and then jumped to spectrum. To me, that implies that we can lever our way into the top economic spot with wireless broadband, and if there’s any truth to that it’s yet to be substantiated by one piece of objective data. Sure we might start a wireless bubble, but it’s not going to transform our economy to facilitate Twitter updates or let teens watch music videos. If we have an economic problem (which clearly we do) it’s because we can’t produce substantive stuff any more; we’re trapped in social networks and deceptive advertisements for herbal supplements and consumer product gimmicks. We became an industrial and economic giant by building the fundamentals—steel, cars, ships, planes. Heavy industry is the base of everyone’s economic stability, and figuring out how to provide incentives (government and technology) there should be our top priority.