Rumor Starts On Wall Street the Recession is Over.
Searching for explanations for how well the markets are behaving despite the overwhelming gloom of unemployment, bank insolvency, government interventionism and the worldwide collapse of trade, manufacturing and resolution, I ran right into the blunt, unexpected, fresh rumor among the traders at the end of the day that the recession is over. This startling measure was not on an idle blog. This was a respected tout at the grim tidings Calculated Risk. These folk are snappy. I would call them bright and cocky like Somalian pirates if this was not momentarily a negative.
dryfly (member) wrote on Wed, 04/15/2009 - 4:15pm.
Market action at the end of the day was incredible. I'm missing the rumor...
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Rumor is the recession is over...
Done. Recovery starts now. I know it is anecdotal, but there it is. In markets, anecdote is what you get before the thundering herd shows up. All metrics are rear view mirror stuff. The future is a rumor. Wells Fargo reports profits, Goldman Sachs does a secondary stock offering, POTUS makes his "glimmers of hope speech," Ben Bernanke says he is "fundamentally optimistic," and there we have it, rally time. The contrary evidence is everywhere. The chief of the NYSE says the March rally was day-traders gaming volatility. UBS just cut its global workforce by 11%. The US has "disinflation," whatever that means (and it sounds like politically correct deflation), with an overall price decline not seen since 1955. The California high-end real estate market is a tomb. Credit cards are blowing up like AQ cells. TARP banks are refusing to lend. Where is the good news?
No New Bad News Does Not Mean Good News.
The US economy looks to be paralyzed and that might be generous. The declines continue if perhaps at a slower rate than the cliff-diving of Q1 '09. It's more like an out of control somersault. The sweaty political class has done the worst damage, with the TARP and stimulus package and grotesque $1 trillion budget all in train to retard recovery for decades. The markets are halved from October 2007 and showing the profile of a major and even historically frightening bear market. The 12% unemployment number in California and Michigan and elsewhere by this summer is generally accepted. There is no crippling jolt that we have not already imagined. Perhaps we are getting used to the abyss. Perhaps this looks like a handhold on the way down. Of course this makes no sense. Mitigating metaphors are meaningless in a depression. Is this a bottoming? Is this a claw back? Of course I do not believe it. No new bad news is not good news at all.
Sunspotlessness and the Markets.
NASA correspondent Bob Zimmerman and I have been watching the solar minimum for the last months. It is a puzzling tale of NASA predicting that we are any month now going to return to the 11-year cycle of minimum to maximum to minimum that we have recorded for two hundred years. Then it doesn't happen. The sun has not been this inactive since 1913. We may be in a deep solar minimum. No one can be sure. There is a surprisingly limited amount of information about the sun and its sunspots, dating back at most to the 17th century. Does it affect life on Earth? Yes. Lack of sunspots is associated with climate change, even a mini ice age during the Late (Baroque) Renaissance. I know it is folly to connect the lack of sunspots for 2009 with the strange behavior of the markets for 2009. I also know it is folly to say that the recession is over. I also know it is futile to predict what happens next to the markets. This is my way of reminding myself that we don't know what we don't know, and we never did know what we don't know. We are blind into the deep solar minimum. We are blind into the deepening recession. How long can the solar minimum last before it is worse than 1913? One more year. There is a horror prediction. One more year of a sagging bear market, of falling house prices, of climbing unemployment, of vanishing credit, of withering trade. Of missing sunspots.
Obama, with considerable help of his propaganda arm, the MSM, is now attempting to talk up the economy. And it seems to be working despite hemorrhaging fundamentals and anti-growth government policies. Will the up-tick last until sunspot activity returns? Hard to say. The Obama team has been able to manage something similar once before. But, at that time, there was a fixed date (Election Day) on which to train their sights. They might just have a more difficult time maintaining traction when the date is open ended or unknown. Is it possible to tell people they are doing great after they have just lost their jobs? Will they believe it? Judging by past experience I am tempted to say that the answer is unequivocally yes.
“ I would prefer not to.”
“You *will* not?”
“ I *prefer* not.”
“Will you tell me, Bartleby, where you were born?”
“I would prefer not to.”
“Will you tell me *any thing* about yourself?”
“I would prefer not to.”
“But what reasonable objection can you have to speak to me? I feel friendly towards you.”
“The time has come; you must quit this place; I am sorry for you; here is money; but you must go.”
“I would prefer not”
“You *must*.”
“I prefer not to dine to-day”
“Eh, He’s asleep, ain’t he?”
“With kings and counsellors”
“Ah, Bartleby! Ah, humanity!”
*Maybe the sun prefers not to spot right now*
*Buttonwood Barters Blot and Spot! Turkeys!!!*
Despite the extended solar minimum, which is historically associated with mini-Ice Ages, the amount of hot air emanating from the global warming nut-cases has not diminished. The blacklisting of scientists who dare to question the party line of global warming continues. The attempt to extort money from producers through the transparently fraudulent sale of global warming indulgences continues. Never let the truth stand in the way of a good con game.
Herein lies an analogy to our present economy and the bear rally it is undergoing. Never mind that the fundamentals are still horrendous--the Messiah hath said that the recession hath ended, therefore let the good times roll!
Those who have not drunk the Koolaid, which causes one to lose all powers of reasoning, had best stay out of the market!
If one were to wish upon a star they would suffer less than to jump into the markets under prepared. All indicators are charged for a bust while the POTUS beams hope and change "buddy can't you spare some?"
Mr. Batchelor some odd story lines have drifted in the ether An Iranian cargo vessel which cause some radiation like symptoms on Somalian pirates and a case of alleged bubonic plague in Algiers ... is there any follow up?
Just in case any of you haven't had this bit of sunshine show through your window... take a moment for the reflection and wonder and be amazed:
http://www.youtube.com/watch?v=9lp0IWv8QZY
Peace!
The only way to make sense of what is happening is to take this out of the sphere of economics, political science, history, politics and put it into the realm of psychology. Can much of the world be suffering from Post Trumatiic Stress Dysorder (PTSD)? Think about it ... people have suffered great losses ... money, homes, savings, jobs, dignity, etc. In addition, there is a terror war that appears to be never ending. Many people are injured emotionally, mentally and physically. People suffering from trauma resort to extreme measures to make sense out of a crazy situation ... forgetting, denying, distancing, pretending, numbing, compartmentalizing, rationalizing, or any other thing that keeps the awful reallity at bay. We need counseling!
giftoflilies - Nice try! And who are the counselors? ACORN, perhaps? Rush? Michael Savage? Michael Moore?
I submit that he people are quite sick of self-proclaimed counselors. They've already been down that road: Oprah; Dr Phil; Brown; Laura; etc. It's gotten them into the mess we're in. Now they're listening to their consciences; their own internal compass that tells them something is very, very wrong. They'll continue to proclaim it; shouting from the rooftops, waiting for the manifestation of a leader who can lead them back from the abyss.
Meanwhile, I don’t see the Republican leadership taking advantage of the situation. The fight is not being fought in the halls of congress. It’s being fought out in the streets against brain-dead MSM reporters. Our Republican representatives appear to be too cowed by the mighty governmental machinery now in place, poised to punish, marginalize and discredit them as extremist right-wing buffoons, to risk any semblance of righteous sentiment. Instead they align themselves with the opposition, endorsing any combination of socialism-lite; fascism-lite, rather than exposing the whole corrupt path as un-American.
The next election (if there is a next election) will be interesting indeed. Faced with another non-choice like we had in ‘08, the American electorate will likely just stay home, thereby rejecting the whole concept of false, media-driven hype, preferring to wash their hands of the inevitable result and deal with any consequence by taking a passive-aggressive stance.
A leader will emerge. It is the nature of the beast to take advantage of dire circumstance. Pray that the American people will trust their instincts and be able to distinguish the wheat from the chaff. Pray that they will have learned that elections do make a difference; that the seriousness with which they approach their civic duty determines the quality of leadership they can expect. John, when will you announce your candidacy?
Hey Peter,
Lighten up ... we are on the same page. Most of the people and organizations you refer to are the predators or the enablers. I was referring to people like John and his experts who keep us focused on the truth, Thaddeus who is steadfast in representing the people and Malcolm who remains calm, cool and collected even though the beast is breathing down his neck. Any you ... who are eloquent in your righteous indignation.
Sorry! Quite right! I fell into the trap of criticizing our own. Why do we do that? I've noticed that John does it too - bashes Republicans, Bush, right-wing radio talkers. What do we expect? Third parties wouldn't have a snowball's chance.
I like Malcolm. I don't envy him. I don't mind when he cracks a little. He's got a tough job - possibly the most hopeless job in the world. I do have a problem with Thaddeus (love that name). He's smart, looks good; but I don't see the passion - that ‘something’ that will take us over the top and save the country.
You're the one with the passion. We need lots and lots like you. I feel encouraged. I'm beginning to see that we're getting close to having them surrounded - and they'll have to stand down.
Great stuff as usual...