Posted on 10/19/2010 7:20:44 AM PDT by blam
The Recovery Is About To End Very Soon, But It's For All The Right Reasons
Vincent Fernando, CFA
Oct. 19, 2010, 9:50 AM
Here's a nice little reminder from Deutsche Bank -- The U.S. economic output recovery (GDP) will soon be coming to an end... though not due to a double-dip but rather due to the fact that U.S. GDP will break above its last pre-crisis peak, and begin making new record highs again.
The recovery will be over and expansion will begin, any time now:
Moreover, there's a twist even. Since 1947 the U.S. economy has never double-dipped into recession before first surpassing its pre-recession peak according to Deutsche Bank. This means that even if the U.S. economy is heading for a double dip recession (another period of GDP contraction coming soon after the most recent one), it's likely that it would first surpass its pre-crisis GDP peak before doing so. This means we're probably in the clear until at least mid-way through 2011, and actually Deutsche even doesn't forecast a double dip.
Deutsche's Carl Riccadonna:
In fact, from 1947 to present the economy has never fallen back into recession without first exceeding the pre-recession peak in output. Since we are not projecting the economy to cross into expansion until Q4-2010/Q1-2011, it would be unprecedented for the economy to relapse into contraction in the meantime. This follows logically, because recessions typically lead to a correction of imbalances, such as excessive inventory levels, abnormally low household savings or overinvestment in housing or capex. As the recession subsides, the newly rebalanced economy subsequently has greater resilience as the next cycle begins.
[snip]
(Excerpt) Read more at businessinsider.com ...
The DJIA is down 140 as I post. See here.
Sure, those green jobs are kicking in, just like Mr. Skittles said. All is well, don’t panic.
What recovery?
U.S. corporations are largely doing OK DESPITE the chuckleheads in Washington DC. If we ever take some shackles off this giant....watch out.
It seems I fell asleep for 20 minutes and missed the recovery cuz no one woke me.
Breaking an all time record numerically doesn’t mean anything unless the growth rate outstrips both inflation and the growth of the debt. Otherwise it’s just malaise or stagflation.
You beat me to that so I’ll second it what recovery??
BAC is getting its bad news out of the way and the market’s been roaring for 6+ weeks.
This can’t be right. Everyone says the sky is falling. (maybe they are all wrong)
You both beat me ... What recovery?
If we all simply hold hands and wish, then we can make all our debt instantly disappear! Isn’t that super? I know it works because day after day, I read articles just like this one, in which the words “debt” or “deficit” never appear, because positive thinking (and the need to sell securities to a skittish investing public) is just that powerful. And now, watch carefully as flying unicorns crap neon rainbows across the sky.
George Sorros and his funny little friends weren't able to keep it up.
Intel CEO just announced on Fox that they will be constructing or retrofitting buildings OR and AZ. Will create 6,000 to 8,000 construction jobs. Good chance I’ll land one of those.
One down day after 6 weeks isn’t a big deal. Sure, the economy is in bad shape and employers are afraid to employ, but there’s not a lot to read into this morning’s drop in the market.
3 digit drops are ALWAYS newsworthy.
A conservative takeover of the House and Senate might be a good start. Vote, call, donate!
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