This time it's no different

''The US data has not been bad. The Fed has indicated that it's not out of bullets. There's no sign of recession in the US and yet the market is pricing for one.''

So what's happening here? Markets are oversold, trading well below their true worth. (I've heard some highly respected economists suggest the true value of the All Ords should be around 5500 points, not sub 4000 where it's been trading lately). Plus, employment remains good – at historically low levels even – and household savings are rising. Bank deposits are growing, and the economy generally remains in positive – though patchy - territory.

To my way of thinking, consumers (far smarter than the politicians they elect) have decided to wait. Purchases are being postponed until the general economic outlook – along with the media headlines – starts to look a bit more certain.

And all this means is that more pre load is being added to the economic spring. The more preload that is added, the more the spring will bounce back as all those postponed consumption decisions will catch up. (This need not mean a return to asset price inflation, as we saw with housing, but it should ideally mean a return to more normal volumes of activity – and money flowing through an economy is as important as blood flowing through your veins).

So what's the hold up?

Confidence it seems is everything, and we don't have much right now. Little wonder, given the economic and political management of our Federal Government. The people – and business – know intuitively that this government is a mess and this isn't a good time for carbon taxes, congestion taxes, taxes of high cholesterol foods, new tax systems, huge expenditures on broadband with uncertain benefits – it's a long list.

But with confidence sapped, and until there's a climate of more stability and certainty in our political leadership, along with signs that the global economy isn't about to fall off the edge of the earth, we aren't likely to see much change. But when it does, the change I suspect will be rapid and positive.

Remember, this time, it's no different to last time.