Here's more about the current economic hypochondria

.....that's all the rage in at the Lame Streamers, and on many know-it-all blogs of all stripes, Brian Wesbury puts it into its proper perspective.

Noteworthy:


"It is hard to imagine any time in history when such rampant pessimism about the economy has existed with so little evidence of serious trouble."


"Models based on recent monetary and tax policy suggest real GDP will grow at a 3% to 3.5% rate in 2008, while the probability of recession this year is 10%. This was true before recent rate cuts and stimulus packages. Now that the Fed has cut interest rates by 175 basis points, the odds of a huge surge in growth later in 2008 have grown. The biggest threat to the economy is still inflation, not recession."


"Beneath every dollar of counterparty risk, and every swap, derivative, or leveraged loan, is a real economic asset. The only way credit troubles could spread to take down the entire system is if the economy completely fell apart. And that only happens when government policy goes wildly off track."


"Yesterday everyone was worried about excessive consumer spending, a lack of saving, exploding debt levels, and federal budget deficits. Today, our government is doing just about everything in its power to help consumers borrow more at low rates, while it is running up the budget deficit to get people to spend more. This is the tyranny of the urgent in an election year and it's the development that investors should really worry about. It reads just like the 1970s."

"Because all debt rests on a foundation of real economic activity, and the real economy is still resilient, the current red alert about a crashing house of cards looks like another false alarm. Warren Buffett, Wilbur Ross and Bank of America are buying, and there is still $1.1 trillion in corporate cash on the books. The bench of potential buyers on the sidelines is deep and strong. Dow 15,000 looks much more likely than Dow 10,000. Keep the faith and stay invested. It's a wonderful buying opportunity."

Not that common sense like this will stop the Knee Jerks from being..........quite frankly, Knee Jerks.

And, as well we know, there are agenda issues to demagogue, and it IS a presidential election year where Dems hope to retake the White House, and.......the list goes on and on.