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5 Signs the Economy is Recovering
What a relief. The markets are up. We’re all saved. It’s time to spend again. Borrow away. The panic’s over. A recovery is coming in 2010. We’re home free, right?
If you listened to Fed Chairman Bernanke today that’s what we would be led to believe. He said “there is a reasonable prospect” the recession will end this year.
Now, I know we have too many houses in overbuilt suburbs that nobody wants at these prices. And the auto industry is sucking down billions of cash each month. Housing prices are still falling. It goes on and on. But the government has…
25Feb2009 | Q1 Publishing | 0 comments | ContinuedThe Road To Recovery Has Potholes
Let’s take care of some old business first.
When I suggested a closer look at long positions in GE and BAC last week, I did not expect each of them to spike violently in two days. That was part luck.
The other half of what I explained ended with the following sentence, which is something I wish was not a repetitive reality:
“All in all, if we don’t see positive, convincing move in the next few trading days, we’re looking at the very real possibility of the bottom falling out.”
Well, the bottom may not have fallen out, but it’s certainly playing with…
13Feb2009 | Oxbury Research | 0 comments | ContinuedWhat Shape Will the U.S. Recession Take: U, W or “Bloody L?”
Right now, the conventional wisdom seems to be that the United States is looking at a "U-shaped" recession and recovery. Output declined gently in the third quarter, is dropping sharply now and will continue dropping sharply in the first and possibly the second quarter of the New Year, finally bottoming out and beginning a slow recovery thereafter.
That’s the natural pattern that most recessions follow. However, this has been a pretty unnatural recession, with a number of highly artificial actions undertaken to fight it, meaning we must plan for the possibility that it won’t be a "U" pattern, but will…
26Dec2008 | Money Morning | 0 comments | ContinuedUnprecedented Volatility Will Precede Highly Profitable Rebound
In the 20 years I’ve been creating stock-market forecasts, I’ve never seen such a contradictory set of forces at work in the markets all at one time. I could just as easily make the case that we’re finally nearing a bottom, as I could that we’re in for protracted downturn punctuated by sharp, quick drops.
The only question in my mind is what shape an eventual recovery will take, for I see three possibilities:
- A "U," with a slow, methodical reversal that gradually transitions into a market rebound.
- A "V," with a quick, sharp reversal that marks the start of a powerful…
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