Another article on another bull how the economy is going to race forward toward 4% GDP, says home prices are at a bottom and a "V" shaped recovery is on the way. I'm laughing at this article and thinking how the tide has turned completely in the other direction in only 2 short months, in march every bank was getting nationalized and martial law was days from taking place and now we have bulls jumping up and down as if were headed back to an economy thats going to provide real growth. Lets get real people, nothing has changed over the last 2 months, in fact things have gotten worse, of course you wont see it because of the 30% run up in stocks, how can it be any worse, as long as the market charges ahead the economy is in great shape. Remember this is a bear market rally and nothing else. Bull Predicts Robert Lenzner, 05.07.09, 05:00 PM EDT Lakshman Acuthan says it's a bull market in stocks; home prices are at bottom and the economy will grow by 4% at year end. Pay attention. This is a major turn of events. The stock market is in a cyclical bull market, not a rally in a bear market. Stock prices and economic activity will rise in a "V" shape, not in a U-shaped, or more ominously L-shaped, fashion as many experts have predicted, and some of us have feared. This trend should continue until at least the end of this year. Housing prices have hit bottom--and the economy is in the midst of shifting dramatically from a 6% annualized loss in GDP to a 4% gain by the end of 2009. That is a 10% turnaround--with a value of $1.4 trillion more economic activity. Not even the Obama administration is predicting 4% growth by year end. If correct, it could put a dent in the expected budget deficit next year. Predicting this is Lakshman Acuthan, a highly prominent forecaster at the Economic Cycle Research Institute (ECRI), a consulting company whose research is used by many corporate chieftains and investment managers. "The harder you throw a ball at the ground, the higher it bounces," says Acuthan in an exclusive interview with Forbes. "You can use this dynamic to predict the economy. There's an 80% correlation between the depth of the recession and the strength of the recovery," says Acuthan, who predicts that the U.S. economy will be growing at a 4% annualized rate by the end of this year. Acuthan says growth rates bottomed in November and have been less negative since December. The ECRI's leading indicator index and its coincidental index have been signaling an easing of the recession for a sufficient number of weeks to make this major call. Acuthan has tended to be more positive as his economic indicators signaled an easing of the recession last December. "The pessimists were too influenced by credit markets freezing, by bank balance sheets and by the precipitous fall in home prices," he maintains. "You don't have to fix these problems before you can have a recovery."
Who pissed in your cheerios? Things -have- changed in the last few months. It is called stabilization and programs taking effect. The fundamentals are much better right now than months ago. Only one more leg of foreclosure supply ahead and green pastures ahead. Within 3 months, I'd bet the Fed will be providing jumbo mortgages as well ... PPIP, no threat of nationalization, job losses peaking already (see econbrowser), MBS quant easing to the tune of 450B already, etc. etc. etc. You get the idea..
Right I get the Idea, everything is peaches and cream, wait till yields start moving higher, the dollar starts to collapse and inflation skyrockets, how anyone can think the economy is headed for more growth is beyond me. As I have said a thousand times, where the hell is growth going to come from, no way no how are you ever going to witness the same growth this economy has had over the last 20 years, its just impossible, tell me where growth is going to come from withOUT the help of the government, enough of the programs and garbage thats propping the markets and economy, they should let the the cards fall where they must. What we are seeing now is too much intervention to prop up the failing economy, and that will lead to many troubles ahead.
You totally forgot to add commercial real estate, just take a drive to your mall or main street and just look around and see how many stores are for rent and lease, near me there are HUNDRED OF THOUSANDS of sq feet available, who in there right mind is going to open up a store front and expect to do business during this time, there are about 5 dealerships that have closed near me and numerous furniture outlets as well. Those empty buildings will be there for years. Credit card delinquencies and billions of dollars worth of ARMS resetting as well, going into 2010. Also the amount of people losing their jobs has not even been factored in yet to the whole housing bust. Its far from over.
'Green pastures ahead.' LMFAO. Get out of that California sun before it shrinks the rest of your corpus callosum. WTF 'green pastures' are you seeing? 'Green pastures' as in the return of growth, let alone robust growth, or growth enough to provide replacement jobs, return to full employment, augment wages? What year? You think it's just particular areas of the nation suffering now? Go talk to Microsoft employees in Seattle or professors or recruiting counselors at Harvard or MIT. Get real. This is the Great Unwinding of the American Century. If China and India can't rise to the occasion and supplement dwindling American consumption, it won't just be bad here, but a global smackdown. Wow. So many, so deluded...believing all the horseshit propaganda about green shoots. ...thinking that high wage jobs, outsourced or snuffed out by the millions in the U.S., with a likely real unemployment rate of 14% soon (or greater), thinking people without jobs or lesser jobs will just keep buying shit at the rate they have during the tech boom or housing boom.
http://www.financialsense.com/fsu/editorials/schiff/2009/0508.html Stocks can rise and economy can fall. Dow can reach 36,000 on the flight of inflation. A loaf of bread can cost Z$2Billion in Zimbabwe. Everyone be careful of inflation!
When the TV is spouting nothing but "bull this, bull that" and your random neighbor is talking about the market going up ..you better get out your parachute.