Of course of course, many indicators have showed significant imrovement. And history had taught us most of these indicators will continue to improve long before they reverse the course. If I had every cent for every time these indicators moving with economy, I would be starting to donate money to ET. 100% up room to go.
Question was evidence of improving economy. Despite all the fundamentals that you cite there is a feeling on the corporate side that things are improving albeit slowly but there is also evidence that things are picking up. Now I personally don't think things are going to pick up enough to overcome some of the systemic issues the economy is facing but I also think that that won't be apparent until late this year, or maybe even next year. I expect we will continue to get moderately encouraging (or at least plausibly spinnable) numbers for the next quarter or two (I anticipate Friday's jobs number will be better than expected, as will the PPI when it is eventually massaged enough to be released) and we will see one last rally, and possibly a rip roaring one at that (in part because there are a lot of big players who are short the market at the moment) before the day of reckoning begins. I fall in to the camp of when rather than if at this point. interesting POV Pabst.
Anecdotal evidence for recovery: 1. I moonlight as a regional sales representative for an electronics component manufacturer. There's been a definite pickup in order activity in the area I cover (NY/New England) during the past nine months. 2. From Mar 2001 thru Aug 2003, many of my friends were getting laid off. During the past few months, I've heard of no new layoffs, and a number of new hires. (Note that I have a high concentration of friends in the telecommunications industry, which may not be reflective of the economy as a whole.)
What do you guys think of the fact that the Dow Transportation are diverging significantly from the S&P500. Looks like the tranportation sector will get hurt because of high oil prices. High commodity prices (inflation) will eventually trickle down into the economy. --MIKE
This is very true. I have been looking at historical unemployment data and if believing the government #s, the current unemployment is not even high. However, we have a population that has raised its standards for employment, wages and lifestyle. So now that the jobs are scarce for all the hopefuls, living standards should come down right? No, the American public refuses to become more frugal, hence keeps spending on debt. So to get a more realistic grip on this economy, we would have to wonder what if the Americans would have adjusted by cutting back on spending due to the outsourced jobs. Well you can kiss those "good" retail numbers good bye. There goes one of your economic recovery signals. What else is there? Productivity? I think we all know what a BS indicator that is when the work force is being cut so much that you have less employees doing the same work. And the corporate profits are just cost cutting and effeciency. In the bubble companies were overspending beyond belief while offsetting it by large revenues, high prices and demand. Now the companies are simply adjusting by having a reasonable spending level and actually being efficient. If the ridiculous debt situation was not in the picture, I would actually believe this economic recovery. But its way too skewed with so much consumption brought by CCs and mortgage refinancings.
Mecro, we should meet someday! Your comments are absolutely correct, and what's more, in the smoke filled rooms of both parties, they agree with you, including the Federal Reserve fact finding teams of junior economists. The reality is we have been fed just so much rehtoric that reality no longer matters. If you eat sugar cereal for breakfast, how long does it take you to realize that all that new found energy is not based on long term strength but fast burning calories? Not long. All the fiscal stimulus through significant, no record increases in the M2 & M3 money supply, along with <1% interest rates being offered on most Discount Rates (Fed Res term), most bank savings accounts and other interest rate products has masked the true deficiency in the overall economy. What does not hold water are these other rhetorical smart mouthed comments: 1) "we inherited the deficit from the other guys" 2) "jobless recovery" 3) "profit recession" 4) "NO, we're not in a depression" The damage that has been done, including all these tax breaks for those who never needed them will take better than 2 Administrations to work off, that's 8 years of growth just to get back to where we were before this group took over in 2000. No, I'm not Democratic, nor Republican. I'm a Trader!
I live in New Jersey. Some signs of economic recovery. 1 For last two years everywhere there were cars for sale. Almost every house had one car for sale outside. In last six month I rarely see a car for sale. 2 Five new huge shopping complexes have opened in last six months. 3 There are signs of now hiring in shopping complexes. 4 There is a complex of bars and restaurants close to our place, in last six months its full. A year ago you would hardly see a handful of people there. 5 I have a friend who runs a travel agency, she was planing to close down a year ago, now she has so much business, she is going bonkers.
Thats interesting since so many jobs left New Jersey and I know that it's not like it got any better there. I've heard of the same situations u mention but I am not fooled by them. You are mentioning real estate bubble effects and consumer spending on debt. Not real signs of recovery just cheap money at work. I know that the discouraged job hunters have been trying many new things. Opening up small businesses such as bars/restaurants is a popular one (even traders doing the same). I have a friend who is doing just that after basically realizing that an IT job is not coming around (he just finished a tech school). His current dead end job is like a year away from being outsourced. So what does he do with his brother? Borrow a huge sum from a bank (cheap money at work) and open up a bar in Queens. Will they be profitable? Probably not. But what else you gonna do. Might as well take advantage of the cheap money while you can. Shopping complexes are always hiring. Those are low level jobs, good to students or low income people. Restaurants and bars are always hiring but that job market has gotten at least 100% more competitive than comparing to 1999-2000. These are service jobs and it's great that USA is getting a strong and established service industry but I just do not trust the spender. You need a real producer and wage earner in order to use the services nowdays. Not enough rich people to feed all the poor through service jobs. It's gonna take time and hard work to really rebounce from the bubble burst. Bush or someone needs to just stand up and tell the spoiled average Americans to stop wasting money on the hot new toys that the retailers are pushing. Even in 1999 with hot jobs and great wages, people were spending above their means. Enough already, save your money, work hard and be frugal. A true recovery will take at least a few more years. USA needs a new industry (possibly nanotech?). Not for a bubble but just a new source of steady jobs. Once the government does not need to feed money for consumers to spend so that the corporates can have expected numbers, then an actual recovery can start.