Sunday, May 17, 2009

Recession's Over......

Break out the Champagne!

Can we get the TARP money back?.......Oh, yeah, and about that so-called "Stimulus" Bill and the pending Obama budget.......we need to scrap those too.

One more thing.....about Mr. Geithner and those unpaid taxes....

Acclaimed Economist Says Recession Is Over
WHEN WILL THIS HORRIBLE recession be over? According to one surprising source, it’s over right now.
The source is Robert J. Gordon, an acclaimed macroeconomist and professor at Northwestern University. It’s surprising to learn he thinks the recession is over, because he is one of seven members of the elite Business Cycle Dating Committee of the National Bureau of Economic Analysis . These are the people who decide officially, for the record books, when recessions begin and end—usually many months after the fact, when the decision is really obvious. I’m unaware of any previous case in which a member of this Committee has ever stepped forward and declared the end of a recession in real time. 
Gordon bases his gutsy call on an indicator that he says the Committee never even looks at: claims for unemployment benefits. He’s talking about the so-called “jobless claims” number that is released every Thursday morning before the market opens. Based on detailed data from state agencies, it reports the number of workers who have asked for unemployment benefits in the previous week. As Gordon points out, there is no other major macroeconomic statistics that comes out so frequently, and so close to real time. 
According to Gordon’s research, in every recession since 1974, the peak in jobless claims came within weeks of the bottom of the recession. This is a remarkable research result, in my opinion. I was impressed a year ago when economist Edward Leamer of UCLA wrote a paper that accurately explained recession timing with just three variables—the unemployment rate, total payroll jobs, and industrial production. But Gordon has done Leamer two better. Gordon has it down to a single variable: claims. And because claims data is available nearly immediately, investors can use Gordon’s insight to make actual trading decisions. r: sã‚th: auto !important; float: none !important; text-decoration: none; display: inline-block; color: rgb(0, 128, 0) !important; font-family: arial; font-weight: normal; font-size: 12px; position: static; border-bottom-width: 1px; border-bottom-style: solid; border-bottom-color: rgb(0, 128, 0); background-position: initial initial; ">GM and Chrysler wouldn’t be making headlines if they didn’t still count for something. Could the auto industry foil Gordon’s indicator today just like it did in 1970? 
Never say never, but I actually doubt it. There is too much other evidence that the worst is over for this economy. I continue to believe that the only truly profound problem facing the economy has been the banking crisis, and all the evidence is that it has now passed. The government’s “stress tests” of the banking system have identified the weak ones, and there is a coherent plan to bolster them. 
This is confirmed by evidence from the most risk-sensitive markets. The global markets for credit default swaps—what amount to insurance policies on risk in financial instruments of all kinds, from commercial real estate to emerging markets—have recovered profoundly from their panic lows of two months ago. 
I still think that the recovery from this recession will be slow and painful. The economy is going to have to fight the headwinds of the enormous government debt that has been loaded on to deal with the recession, and with the higher taxes and inflation that will flow from that. But I agree with Gordon. We’ve seen the worst. The bottom is in.    MORE....

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