Its funny how easily opinions are changed about recessions. GOOG, IBM, CAT report good numbers and you see recession odds go from 70% to now 20.5%. This chart is from intrade and in now way this is an exact indicator but the media and people who comment about the markets need to start having more concrete convictions before they speak.
We're going to be alright. The US economy is strong. Emerging and developing countries are experiencing growth we've never seen before. I've been buying for the last few months, I think you should be doing the same.
Chart via mjperry.blogspot.com
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2 comments:
I like your optimism and the market has seen some great gains over the last couple days, but I don't think we are out of the woods just yet. The stock market has been trading very irrationally lately with up moves on billion dollar write downs on Wall Street. Some claim that fundamentals have started to come back in line in the last few months but I think caution is a prudent choice.
I haven't listened to any of the calls but from what I've read on Google, IBM, and Caterpillar is that their earnings were driven heavily from overseas operations which is good for the company but maybe not so good for the U.S. economy. While it's true that exports do contribute to GDP it is nowhere near consumption (70%) and this is the recession indicator indicator we need to watch. Until housing prices stop falling the U.S. consumer is in trouble and in turn so will the economy.
Opinions about the recession certainly are changing day-to-day which is decidedly better than an unequivocally negative outlook on the economy. It also appears that the weak dollar is already doing its part to help.
Interesting market oddity, the recession predictions are back to up $60ish (http://data.intrade.com/graphing/temp/chart120644812292391446.png).
Although the spread is quite big compared to some of the political contracts (58.2:67.7 as of this writing).
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