Ok lets take the assumption the recession is almost over and we are in a L shaped recovery. What would it mean for the stock market and traders. Will the market just go sideways and what can the FED do. If we are at 0 interest rates, and they are already pumping 100's of billions, and the government is already stimulating.
I've been meaning to ask this, 'cause I am hearing it a lot... Isn't "L-shaped recovery" an oxymoron?
L Stopped going down.... And does not go back up.... Just stays down.... Where it stopped.... Recovery ......Nope....
Market will undulate, trying to "pick the economic bottom" and sell when it realizes, yet again, that the bottom hasn't occurred. Monetary policy will be reckless, and accomodative. This will make sure that there are some asset prices that are increasing on bank and consumer balance sheets, allowing further access to credit. It'll just be a rollercoaster ride, underpinned by a stagflationary environment.
it just means we have stopped going down, but we arent going up in economic terms, like job growth, increase profits, and etc. If its like what britain went throught or what japan went throught. Stabilzation without any growth.
Once the credit bubble is washed out (to whatever degree it's going to with Fed printing money like mad), the economy is likely to "lightly simmer along" at a significantly lower pace than at the peak of '06-'07. Unemployment rate will be high... likely, disturbingly so. Job growth will be hard to come by except for make-work by the government. Stock market likely to mostly trade in sideways range of perhaps 20-30% from low to high. That will be good for those who "think trading range"... bad for those who hope every uptick is the start of a new bull market.