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Old 04-07-2011, 09:12 AM   #101
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Let's set a date to check back here in a year and see who was right.
Today is one year later...

(one year ago Liz Ann Sonders was quoted in an article, saying: "I'm amazed people still say it's not a 'V'-shaped recovery, which to means they're simply not looking at the charts," (...) And by "charts" she doesn't (just) mean the stock market but trends in both leading and coincident economic indicators, industrial production, and inventories. "They're all 'V'," she says, suggesting many observers are overestimating the impact of consumer spending on both the 2008 downturn and the recovery to date.
Even leading indicators of jobs, including jobless claims and temp hiring, are pointing to growth akin to the strong 1983 recovery vs. the "jobless" recoveries of the early 1990s and 2001, Sonders says. (...) Rather than questioning the recovery, the "more valid debate" is whether the V-shaped pattern that's emerged is "the left side of a 'W' or [part of] a square root sign," Sonders says. "More likely the worst-case scenario is a square-root type recovery. Other than some massive policy mistake akin to the 1930s...the risks of a [‘W'-shaped double-dip] are relatively low." Liz Ann Sonders agrees.)
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Old 04-07-2011, 03:52 PM   #102
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Today is one year later...
Sure is, but you left out all the relevant info . . .


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Remember that growth and contraction is determined by changes in economic activity, not stasis. So contraction was driven, in part, by rising layoffs and a resulting reduction in consumer spending. But the thrust behind that is pretty much spent. Layoffs are declining, as is consumer retrenchment. So the force behind contraction is abating. Meanwhile people still need things. And they need to replace things that maybe should have been replaced two years ago. So pent-up demand causes some forward momentum. Which, hopefully, results in hiring and a self sustaining recovery.

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Sounds like wishful thinking, which is what this Congress and Administration are all about..........
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Maybe. But it also the consensus view among economists.

Let's set a date to check back here in a year and see who was right.

Or maybe I should ask if you want to go "double or nothing". From May 2009 . ..

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Now how do you define "right" in this case? Which indicators will we use? GDP and U-6?

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I'll say that one year forward the economy will be expanding (i.e. we're not in a technical recession) and that unemployment (currently 9.7%) will be lower.
As of today, we are not in a technical recession and the unemployment rate is 8.8%. It would have been a bad bet for the laundry list of naysayers who populated this thread a year earlier.
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Old 04-08-2011, 10:08 AM   #103
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V-shaped or U-shaped recovery, it is past and I do not care at this point, being 70% in equities and having enjoyed a portfolio that's 73% higher than the low in March 09. In fact, at this point, I am 9% above my high in Oct 07, when the Dow was at 14,000. Yes, this result despite having dipped into it to live, to buy motorized toys, and recently, to give a significant sum to my daughter for her house down payment.

But, but, but, looking ahead should I rejoice and let my guard down? Remember, just a couple more "Wh***'s" and W-shaped recovery, here we come!
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Old 04-08-2011, 12:46 PM   #104
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Knock on wood, but people I know who want to w*rk have found jobs, and Dimsumkid and Katsmeow here have sold their houses. So good news abounds.

However, I vote for this to be a wheee-free thread
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Old 04-08-2011, 02:29 PM   #105
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Mankiw has a recent post titled "A V, 2 U's, and an L"
Greg Mankiw's Blog: A V, 2 Us, and an L

He's looking at employment/population, which picks up discouraged and involuntarily retired in the denominator.

These things always vary depending on your perspective. If you're a stock investor, you see that corp profits and stock prices are up sharply. If you like to track GDP, you see it has changed direction. If you are an un- or under-employed worker, the recovery hasn't arrived yet.

AFAIK, that's the typical sequence in this type of situation. But the Great Recession isn't exactly like other post-war recessions, so I'm not predicting any numbers.
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Old 04-08-2011, 06:45 PM   #106
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When the treasury and Fed borrow and print trillions they can throw one heck of a party. I just wonder if there'll be a hangover. Let the good times roll.
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Old 04-11-2011, 09:49 AM   #107
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I'll say that one year forward the economy will be expanding (i.e. we're not in a technical recession) and that unemployment (currently 9.7%) will be lower.
As of today, we are not in a technical recession and the unemployment rate is 8.8%. It would have been a bad bet for the laundry list of naysayers who populated this thread a year earlier.
Well played Sir.

Let's hope things work out for the best in spite of the dangerous game that's being played.
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Old 04-11-2011, 10:53 AM   #108
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Let's hope things work out for the best in spite of the dangerous game that's being played.
I would propose that the executive and legislative branches are the ones playing the dangerous game. Without their shenanigans and mismanagement, there'd be little need for FRB sleight-of-hand...
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Old 04-11-2011, 09:08 PM   #109
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Well played Sir.

Let's hope things work out for the best in spite of the dangerous game that's being played.
Sigh. People have been forecasting hyper inflation and a collapsing dollar for two and a half years. LTM inflation is 2.1% and the dollar index is higher than when the crisis began (see chart in the link above). Never do they stop to explain why their forecasts have been wrong (monetary policy works with a lag of between six and twelve months so they have most certainly been wrong). And more importantly, nobody discusses what state the economy would be in today if the Fed followed their policy recommendations in 2008, 2009, 2010 and 2011.
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Old 04-12-2011, 08:31 AM   #110
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Sigh. People have been forecasting hyper inflation and a collapsing dollar for two and a half years. LTM inflation is 2.1%...
But the overall published inflation report seriously masks the much higher inflation rate in essentials like food, energy and health care and doesn't take into account that incomes are rising less than even the published inflation rate which understates cost increases for a typical household of modest means.

Sure, inflation isn't a problem if you mostly buy big screen TVs and cruise vacations. But in a biflationary environment if all you're buying is stuff people *need*, the advertised inflation rate is a cruel joke.
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