Manufacturing output expands for first time in 18 months (Recession Likely Over)

[scheming daemons]

Manufacturing Index Shows Economy Escaping Recession
Published: Tuesday, 1 Sep 2009 | 10:09 AM ET Text Size By: Reuters

Manufacturing expanded for the first time in 18 months while the overall economy grew for the fourth month in a row, according to the latest Institute of Supply Management report.

ISM said its index of national factory activity rose to 52.9 in August from 48.9 in July. The median forecast of 78 economists surveyed by Reuters was for a reading of 50.5.

A reading above 50 indicates expansion in the manufacturing sector.

The last time the index showed growth in the sector was in January 2008 with a reading of 50.8.

.
.
.

http://www.cnbc.com/id/32641014


Note for lurking Freepers: Obama's been in office for less than 8 months. We've been in a "manufacturing recession" for 18 months. This is your recession that the Obama administration is digging us out of.

[Craftsman]

1. No good jobs = no recovery

[Dulcinea]

50. This is all well and good...

...but the real indicator will be when people start getting good jobs again! I know that's the last thing that will improve (sigh.)

[abumbyanyothername]

2. I would be encouraged about this but . . . .

I fear that much of this is increased activity in the auto sector that was juiced by drawing sales forward from the future through the use of the cash for clunkers incentives.

[scheming daemons]

3. That's exactly what "stimulus" is supposed to do

The C4C program worked just a Keynesian economics said it should.

[abumbyanyothername]

5. I never said it didn't work

I just said that this particular data might not be reliable because it was affected by that stimulus that likely won't be repeated.

We are still facing some structural problems in this economy:

1) An excessive amount of energy is being imported.
2) We continue to need huge infusions of foreign capital to feed the engine.
3) If China decides to float its currency (stop buying US debt), we are totally screwed. But then again, so are they.

[Romulox]

8. Trillions of taxpayer $$$ to mulinational corporations doesn't sound like any Keynesian economics

I've ever heard of (speaking of both the TARP and the Fed bailout of banks.)

[scheming daemons]

12. Neither TARP nor Fed actions were part of the Stimulus package...

...but thanks for responding to our conversation with a complete non-sequitir.

[Romulox]

14. So your point only stands if we ignore the TARP, Fed bailout, etc. etc.

That's so silly that it speaks for its self! The various government bailout programs followed the Keynesian model, if you ignore that the vast majority of money dispersed by the Federal Government to "stimulate" the economy (e.g. under the TARP and Fed bailout) were not distributed based on Keynesian principles at all!

Of course, none of the above has anything to do with anything Schaeming Demans wants to talk about. Thus, by definition these inconvenient facts must be "complete non-sequitir" (sic).

Would Keynes have approved of the fact that the bulk of the Cash for Clunkers monies have been claimed by foreign corporations?

Again, this sounds like no Keynes I've heard of! :hi:

[scheming daemons]

23. You're unhinged

1) The poster talked about Cash-for-clunkers
2) I responded that Cash-for-clunkers was a perfect, Keynesian stimulus package
3) You went off half-cocked about TARP and Fed bailouts.


To recap... a poster an I were talking about C4C, you interjected by talking about TARP. If you want to argue that TARP was NOT Keynesian, that's another discussion.


As to your last point.... you can put "foreign corporations" in bold all you want... we have a global economy. Those Hondas and Toyotas that were purchased during the C4C program were built in Ohio, Maryland, California, and other states by American workers. Many of the GMs, Fords, and Chryslers were built in Canada by non-American workers.

You want to focus on the address of the corporate headquarters, that's fine. But that Ford or GM you're driving around is more likely to have been assembled by non-American workers than my Toyota Camry - which was built in Maryland.

You're stuck in 1970s-era thinking about the economy, especially when it comes to the auto industry.

So enjoy your likely-built-in-Vancouver GM vehicle... and your outdated thinking about what really constitutes "American-made".

[Romulox]

31. Did Keynes advocate sending taxpayer monies to foreign corporations? Yes or no?

If 'no', how can you justify labeling the practice "Keynesian"? It's dishonest. :hi:

[scheming daemons]

33. He didn't address it at all...

...since there was no such thing as "multi-national" corporations in his time.


The fact is... Toyota employs as many Americans as Chrysler does. GM employs a GREATER percentage of Canada's work force than it does of America's.


The concept of "foreign corporation" is a quaint anachronism that doesn't really exist anymore.


All large corporations are global is scope now. Their "home address" is irrelevant except for out-dated income tax systems.

[Romulox]

36. So why do you invoke his name to justify globalism? That's dishonest.

:hi:

[scheming daemons]

39. Sigh... changing the subject again

A tactic often used by those losing an argument.



I invoked Keynes name in response to this:

1) My OP points out that manufacturing is up
2) Response from poster said this is due to C4C program
3) My response to poster is that proves that Keynesian economics works

Fact: C4C program was a Keynesian stimulus
Fact: Manufacturing is up

Conclusion: Keynesian Stimuli work!



Romulux: "But wait! I have *OTHER* economic discussions I want to have while shitting on your positive economic thread!"


:eyes:

[Romulox]

42. We weren't just talking about whether it was honest to invoke Keynes to defend C4C???

"Non-sequitur" is defined in your world as anything inconvenient to your argument, I suspect.

[A HERETIC I AM]

47. Umm...minor point here, but GM does not have nor ever did have a plant in Vancouver, BC.

http://en.wikipedia.org/wiki/List_of_GM_factories

[JVS]

30. It only will have worked if it manages to cause more spending down the line.

We've heard the starter motor, now we're listening for the engine to turn over and start running.

[HamdenRice]

4. The long slow climb back begins nt

[Romulox]

7. Hey! I see you're back after yesterday's big retreat! nt

[scheming daemons]

9. Excuse me?

What thread are you referring to?

[Romulox]

16. I've talked to you about this before. You need to stop trying to smother every sub thread.

HamdenRice knows what thread he ran away from yesterday.

He also knows that I'm really disappointed that he won't address some bizarre, fabricated comments he's made on these boards about me.

Specifically, he recently said, "He (Romulox) says, that anyone with more than $1000 in the bank is a 'class traitor'." Really, it's both a bizarre and silly comment--one more revealing of the slanderer than the person in whose mouth he places his words.

But Hamden's refusal to even admit to the wrongdoing is the truly undignified part. As far as I'm concerned, a lack of integrity reveals a lack of self respect.

[scheming daemons]

24. See post #8, hypocrite

Who is interjecting in other people's subthreads?

[Romulox]

40. There's a difference between interjecting once or twice, and interjecting on all subthreads

We talked about the latter practice, not the former. As in most things in life, it's a matter of degree. But if it will make you acknowledge that I have a point, and that interjecting ones comments in multiple subthreads can be stifling to conversation, I will issue a mea culpa.

How about you?

[scheming daemons]

27. Actually, I think HamdenRice has you pegged perfectly

The American economy hasn't been good to you, so you've withdrawn and become a let-it-fail advocate.


Your rooting against the success of the administration and the country as a whole has been noted.

[Romulox]

32. Posts are weakest when they probe an inferred biography.

Both you and Hamden assume me to be indigent. That's not a fair assumption. I won't share biographical details, however. Let's leave it at that.

"Your rooting against the success of the administration and the country as a whole has been noted."

What, do you have an "enemies list"??? :wow:

I thought you and Hamden styled yourselves some sort of economics gurus. Why can't you guys answer simple questions? Any subjects other than invective and innuendo on your economics syllabi??? :silly:

[scheming daemons]

38. "I thought you... styled yourself some sort of economic guru"

I won't answer for Hamden, just for myself.


It's interesting your reaction to a newsfeed OP that was simply relaying facts about the manufacturing sector of our economy.

Other than my swipe at Freepers at the end, there was no opinion proferred by me. Simply the fact that the manufacturing index went over 50.0 for the first time in 18 months, which is the cutoff line between growth and recession in that sector.

This fact apparently has made you unhinged.

The only conclusion to draw from that is that the concept of "good economic news" pisses you off. And why would that be? Answer THAT simple question.

I think I already know the real answer.



As to your last sentence.... I've answered all your silly questions...even when they didn't deserve an answer.... you just happen to not like the answers, so you come back with the inane "why won't you answer my questions?"

[HamdenRice]

15. Retreat?

Actually, after I completely refuted your continued ludicrous repetitions, a friend pm'd me and asked, "why are you continuing to respond to that idiot?"

I had no good answer, so I let it die.

[Romulox]

17. "I had no good answer, so I let it die."

One of the only honest things I've ever seen you post here.

It would've still been a decent thing to do to admit to making up bizarre ad hominems, and to apologize. I would've let it drop right there. But your lack of ability to even admit to what we both know you did is distressing.

[HamdenRice]

18. Actually, you misread. I had no good response to the DUer's observation that you're an idiot

It was entirely true.

[Romulox]

20. So not even a iota of basic respect for the truth...sad.

You couldn't answer my question: "What is the overall ROI on the TARP package" because you don't know the answer.

Yet (incredibly?) you claim the TARP is "profitable". :wtf:

[HamdenRice]

21. I gave you the answer several times, which is why DUers concluded that you are an idiot.

Actually the person used a term that I'm not allowed to use but it's actually more accurate.

[Romulox]

22. You said it was impossible for the TARP to return less than 5%

That's a prediction of the future (and not one based on fact, either.)

That's not an answer as to what the TARP's current ROI is. Today. Actually yesterday, when you said that the TARP was "profitable". If it were profitable yesterday, as you asserted, you should be able to tell me what the overall ROI was. Yesterday.

Not what it is projected to be some date into the future, but what it was yesterday, when you made the assertion that it was "profitable". You couldn't give a figure of any kind.

Moreover, your assertion that it is impossible for a TARP loan to an insolvent bank to be unrepayed is bizarre and unmoored from reality.

Finally, your lack of integrity is underscored by your unwillingness to address your behavior. Here's a hint: if you're ashamed of talking about it after the fact, it's probably wrong.

[HamdenRice]

25. Actually, you've got it exactly backwards--as usual

Return on investment is calculated as of the date of its calculation. I told you -- and you seem impervious to facts -- that its the return is based on quarterly dividend payments since last fall. The return is not projected; it is based on the last several quarters.

But your absolute inability to comprehend the simplest economic and financial concepts is why people pm'd me and asked, why continue to discuss anything with that idiot -- a question to which there is, in fact, no answer.

You simply don't know enough to have a conversation with.

[Romulox]

28. Right, but you were making assertions *as to the overall package*, not just the present quarter.

"But your absolute inability to comprehend the simplest economic and financial concepts"

I've got it. How does this buttress your claim that the overall TARP package is "profitable"? Couldn't the next quarter be markedly worse than the last, especially since the early repayers of TARP monies/redeemers of warrants were likely the healthy banks forced by into accepting TARP funds so as not to "stigmatize" the insolvent banks participating in the program?

Short answer? It doesn't. Your post was an prediction about the future of TARP wrapped up in a cherry-picked assertion about a few early repayers. None of this supports the broader claim that the TARP is "profitable" as a whole.

"You simply don't know enough to have a conversation with."

Of course I do. You mistake ideology for facts, and declare that anyone that challenges the former couldn't possibly grasp the latter. Then you attempt to hide your own inability to articulate your point with a copious smoke-screen of insults and ad hominems. Apparently, you needed a friend to insult me this time.

Pity your friend couldn't help you explain how the overall TARP is "profitable"? :silly:

[HamdenRice]

35. Once again -- I know this is like talking to a brick wall -- you've got it completely backwards

I'm not making predictions. I'm telling you what the return has been, which has been profitable.

Let me try to get across this extremely simple idea:

YOU ARE THE ONE WHO IS ASKING FOR THE PREDICTION OR PROJECTION OF WHETHER THE PROGRAM ULTIMATELY WILL BE PROFITABLE.

I'm telling you what the return has been up until now. If you can't grasp that, you are indeed hopeless.

[Romulox]

37. I'm asking for anyone who asserts the TARP is "profitable" to present the data

"YOU ARE THE ONE WHO IS ASKING FOR THE PREDICTION OR PROJECTION OF WHETHER THE PROGRAM ULTIMATELY WILL BE PROFITABLE."

No I'm not. I was responding to a person who posted a thread that asserted that the TARP was indeed profitable. You jumped on the thread in defense of the assertion. If you want to misrepresent the contents of the discussion, I can post the link.

I make no predictions as to the overall TARP package at this time, save that I think a "break even" state would be the best we can aspire to. But I do challenge anyone who asserts that the TARP is "profitable" show their numbers. :hi:

[Romulox]

6. LOL at the title of the OP! Maybe if you say it enough times?

:rofl:

[scheming daemons]

10. I didn't say it... Reuters did

But you can keep on your "let if fail" crusade.

[Romulox]

19. Link to Reuters prediction about last years economic collapse?

:hi:

You guys all want to be respected as fortune tellers, but show me where you've been right before!

[scheming daemons]

26. Who's "you guys"?

I'm reporting the manufacturing numbers out TODAY.... not some prediction.

Cold hard fact.

[Romulox]

34. From the OP title: "(Recession Likely Over)". That's a prediction.

:hi:

[scheming daemons]

41. That's from the article...

[Romulox]

43. So, where is the Reuters prediction of the present malaise?

That was my question in the first place.

[cbdo2007]

11. Que all the negative DUers who think the recession is just starting and will get much worse...

[scheming daemons]

13. Cool! unrecs for a newsfeed OP that says the economy is getting better!

I see the "Let it fail!" crowd is out in full force.

[cbdo2007]

29. DU is not the place for common sense, hope, or anything positive regarding the economy.

I appreciated the article though. :)

[caseymoz]

51. Let me try to tell you why skepticism is justified.

If a batter goes 0 for 110 and then gets one hit, is that a sign that he's becoming a .340 hitter? If an NFL team goes 0 for 18, and then finally wins a game, and if you had no other information, how much would you bet that they'd finish better than last that year?

Rarely do you ever have a consecutive 18-month decline in any economic statistic. Statistically speaking, you would expect to see one month that doesn't decline long before this.

After a decline like that, an economist (of the academic and not the media sort) will never tell you that a single month of improvement is a recovery. No, it's called a relief. A sign of a recovery is three straight months of improvement. Five out of six months would be a recovery, or an improvement.

[Statistical]

53. Housing prices have risen for 3 months in a row.

The ISM had increased for 4 months in a row.
The number of housing starts has increased 6 months in a row.
The treasury curve has steepened for 9 months in a row.
GDP for Q1 was revised upward, GDP for Q2 was revised upward.
Consumer sentiment has risen 4 of last 6 months.

It isn't one stat and it isn't one month.

[caseymoz]

58. You might have started with the figures here rather than the snarkiness.

And you might not have cast doubt on your credibility by showing only the best numbers and without making any analysis or asking any questions.

People here tend to be quite skeptical about optimism as a means of economic growth, and about the use of numbers to create optimism for their psychological purposes. And they should be.

See my answer to you below.

[eridani]

59. It doesn't matter if the "economy" is getting better. What matters is if PEOPLE are doing better

We aren't. American families have been falling behind since 1980. We've already done all the bubble and debt options that we've used to paper over that fact. Consumers with poorly paid jobs can't sustain a economy based 70% on consumer spending.

[Statistical]

44. You are not allowed to post positive information about the economy.

The economy can only go in one direction.... down.

It isn't just the ISM numbers. A week ago I posted a whole bunch of numbers and got the same response.

Pending sales are up month over month and year over year.
Average home price are up for third month in a row.
Consumer spending numbers are still down but increased month over month more than expected.
GDP loss for Q2 was revised down from 1.9% to 0.8%
The bond curve is getting steeper (longer money paying substantially more)

All the leading indicators are showing the recession either ending now or sometime in Q3.
Recessions have already officially ended in a dozen countries around the world.
China is slowing lending because they fear they are growing too fast.

However despite all that the only acceptable news is doom & gloom.

I guess what the doom & gloomers realize is fair or not if it is still all doom & gloom in 2010 and/or 2012 Republicans will win big.

[caseymoz]

56. Are you willing to put that beside the numbers that are not so good? Because there are a few.

Otherwise, I might think you're motivated more by spreading propaganda than spreading news, especially when we've just had the biggest cash giveaway to banks in history, by both democratic and republican administrations.

And really, some of us don't believe in optimism for actually growing an economy. Stopping an economy from sinking, yes, but growing one? It just creates bubbles.

Here are the not-so-good numbers:

*Foreclosures of commercial real estate ran 3.41 percent in July, six times what it was running in July, 2008.
*Unemployment and income figures have been poor, meaning that consumer spending is not coming back soon-- unless those manufacturing companies begin to hire a lot of people soon.
*Retail sales figures fell in July by 0.1 percent. If you leave out car sales spurred by the CARS program, they fell 2.4 percent.
*Bankruptcies, personal and business, were up for the first half of this year by 36 percent over the same half of 2008. (Even after GWB "reforms." There were 711,500 business and personal bankruptcies (that's running at 1.4 million a year!) Chapter 7 business liquidations are up 57 percent, Chapter 11's are up 111 percent.
*Home foreclosures set a new record in July, with 360,149 new foreclosure filings, which was the third time in five months home foreclosures set a record. This is now, eighteen months after the mortgage crisis began.

These are only some of the bad numbers I can site. Now, tell me, does these say "recovery" to you?

Here are some questions I'd like to ask about some of your numbers:

*How many of the "pending sales" actually closed, that is, receive mortgages now? Do you have those figures?
*If home prices are up, how long are they actually staying on-market? Could they be up in only anticipation of a recovery? In other words, how much of the price increase are speculative?
*How much of that GDP was due to reviving Goldman-Sachs, Citi, and the rest of them, on the same business model that got us into this?
*Who is buying those steepening bonds, in what, and how smart are they? Why is credit generally still frozen?

If the purpose of the good numbers was to increase optimism, it's using misdirection to create optimism which got us into every bubble we have been suffering, including this last one that just almost destroyed the world.

[flyarm]

45. I call bullshit , bullshit , bullshit!!!!!!!!!!

where are the jobs????????

no jobs no recovery..just more and more propaganda and bullshit!
some of my friends own big manufacturing businesses and they can barely keep their doors open..bullshit is bullshit..learn to tell the difference! Two of my dear friends have never in 40+ years ever laid people off and now they must...just to keep afloat.Wake the fuck up and stop with the propaganda..until jobs are created and until this white house cleans out the fuckers that got us in this place..we will not have a recovery..only momentary feel good sessions!


in guess you missed this thread eh????

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=114x69493

a thanks to girl gone mad for posting this excellent piece of journalism!

girl gone mad (1000+ posts) Tue Sep-01-09 07:41 AM
Original message
Forbes Polls the Wackosphere and Gets An Earful
Forbes Polls the Wackosphere and Gets An Earful
by Lee Adler
The Wall Street Examiner

The editors of Forbes have asked me to give them my economic forecast for the next year (cough, cough, guffaw). Don’t be impressed. They sent the same email to the whole financial wackosphere. I assume that their purpose, as with the entire financial infomercial media, is to poke fun at us wackos so as to minimize their own horrendous shortcomings as financial journalists.

OK, so I’ll give them an answer since they were nice enough to ask. But let me preface this for those of you who don’t know me by saying that I’m not an economist, thank goodness. What an embarrassment that would be. My educational background is in accounting (undergrad) and psychology (grad ). My professional career over the past 22 years has been spent mostly in real estate and financial market analytics. So I’ve had some exposure to the real economy and the financial economy.

I’ve had a particular interest throughout my life in manias and their aftermath. I’m a self taught technical analyst (aren’t we all), having first become interested in the art of TA at the ripe old age of 13 when I was introduced to point and figure charting. What I have learned about liquidity analysis, an area in which I specialize, has been through independent research, observation and study. My ideas are not polluted by the shibboleths of formal education. My interest in manias brought me back to my current job as an independent self-employed professional analyst and web publisher in 2000 when I founded Capitalstool.com. I founded The Wall Street Examiner in 2004.

In my late 20s I worked for several years as a sell side technical analyst for a couple of institutional boutique firms on Wall Street. Let’s just say that the Street and I did not mix.

I had morals.

While working on the Street in the early 1980s, thanks to reading people like Joe Granville, Richard Ney (The Wall Street Jungle), and Charles Mackay (Extraordinary Popular Delusions, etc.) I realized that the financial media was nothing more than the marketing arm of the Wall Street retail distribution network. Wall Street’s job is to distribute paper and transfer wealth from the many to the few, including, most importantly, itself. The media’s job is to transmit the sales pitch.

The financial infomercial media plays a crucial and integral role in that system, providing a platform for Wall Street’s professional shills to reach the masses. It is the greatest manipulative system in the world since Goebbels, mastering the art of repeating the Big Lie to perfection. When a shill comes on CNBC and says buy XYZ, his in house traders are the ones doing the selling.

One of the Big Lies is that the stock market discounts the future. We’ve had a big rally, so the economy must be about to get a lot better, so the story goes. But the truth is that the stock market is nothing more than a liquidity meter. It measures a very particular type of liquidity. It mostly measures how much cash is burning a hole in the pockets of the dealer community.

Right now, thanks to the Fed, the dealer community, particularly the Fed’s Primary Dealers who dominate not only the Treasury market but the stock market as well, are rolling in oceans of cash, pumped directly to them by the Fed. They are using most of it to pay down debt by selling much of their questionable assets to the Fed, particularly mortgage debt and corporate debt, but they are using some of it to manipulate stocks higher. They do that because, one, it’s easy for them to do it, and two, because it’s much easier to get the suckers, oops, I mean the buy side institutions, to take the other side of the trade when prices are rising.

So as long as the Fed pumps this cash to them, stock prices will go up. It has nothing to do with the economy. It has nothing to do with discounting the future. The idea that stock prices discount the future is ridiculous. Stock markets are comprised of people, or at least the people who wrote the computer programs that do most of the millisecond trading that dominates price action. People, by and large, are not very good at predicting the future. That’s especially true of economists, pundits, and most of all, portfolio managers, whose only real interest is in not doing anything different than what the majority of portfolio managers are doing. How in the world can a portfolio manager properly manage money when one of the mandates of the industry is to stay fully invested. The best they can hope for is to do better than their peers. They can do nothing to protect your assets in the event of systemic collapse, such as we are now facing.

In continuing to spread the lies this time around, the media helps to insure that for the foreseeable future there will be no recovery from this economic and financial mess. The media continues to feature the same people telling the same idiotic stories, pursuing the same tried and true practices of distributing insider stock, especially their own, at high prices to the masses. The cash goes right from our pockets to the pockets of the financiers, with the media getting a huge cut in the process. They are co conspirators in a massive criminal scheme, some of it legal, some of it not, to separate people from their money.

More...

[cbdo2007]

46. ROFLMAO

...right on schedule

[Mudoria]

55. It's only to be expected...

[Donnachaidh]

49. it IS bullshit.

thank you!

[caseymoz]

48. The fact is, things usually can't go straight down indefinitely.

A straight eighteen month decline in itself is a very extraordinary drop. I would hardly call a single month of weak improvement following eighteen months of decline a sign of recovery-- it may be a relief, but it's not a sign of recovery.

I'm sorry to be so stubbornly pessimistic here. Obama's stimulus has, at most, bought us time. Not a thing has been done to repair this economy's structural problems in the time it has bought.

[Statistical]

54. One month? The ISM has been increasing for 9 straight months.

Chart:
http://www.bullandbearwise.com/ManuISM.asp

Complete report:
http://www.ism.ws/ISMReport/MfgROB.cfm
The ISM Survey hit a low of 32.9 in DEC 2008 and has been climbing every month since then.

[slipslidingaway]

52. FWIW - this is from April 2002...

http://contraryinvestor.com/2002archives/moapr02.htm

"...ISM-Metrics...The so-far perceptual drivers of the classic recovery thought process is the improvement in manufacturing numbers and continued stability in housing as of late. Corporate capital spending is still quite subdued at best. Likewise on the retail consumer front, revenue growth strength is seen as the province of the discount sector. Humble question: Can an economic recovery be built on the back of profit expansion at WalMart alone? Strength residing in the low margined discount community simply begs the question of an improvement in macro corporate profitability. As you know, manufacturing is certainly one of the more volatile sectors of the economy historically. Both from a revenue and employment standpoint. A more true characterization of boom and bust than not. Ultimately our economy is dependent on consumption.

For the new age market historian crowd, the Institute of Supply Management (ISM) index has decisively crossed 50 in recent months for the first time in a year and one half. (Being a diffusion index, a reading above 50 connotes expansion.) At least for now, a manufacturing recovery is in process:

***see link for chart


The ISM (former National Association of Purchasing Managers Index) along with other purchasing indices such as the Chicago PMI, etc., have been one of the cornerstones of predictive substantiation for modern day historians. In each post recessionary period of decades past, equity markets have performed very well after the ISM has broken 50 to the upside. But, as to how the real economy relates to the current financial markets, a further turning of the very dusty pages of history reveals the following:

***see link for table

To no one's real surprise, the historical twist left out of the modern day message is valuation. In no post recessionary period of the last three decades has macro equity valuation been as high as we now experience. We do not debate headline economic improvement in the least. It's the ability of the stock market to move significantly higher from here that is in question. The "history" contained in the table above suggests that to attain similar post recession S&P performance, currently depressed earnings are going to have to double ahead. Players, place your bets..."


And the new monthly article...

http://contraryinvestor.com/mo.htm

"The "Other" Real Estate Issue- Revisited

The “Other” Real Estate Issue - Revisited…It was in early February of this year that we penned a discussion about the state of the commercial real estate markets. Of course at the time the Street’s eyes were collectively glued on the near free fall in residential real estate values and general activity...


There you have it. We suggested in February of this year that CRE would be an important issue before the current year had run its course. The numbers, analysis and industry commentary tidbits suggest the down cycle is far from complete. The ultimate impact on the financial sector remains an open question mark at this point. Will banks simply ignore the issue, as they continue to do with many a residential real estate foreclosure situation by simply not sending out notices of default? Will the Fed/Treasury/Administration devise yet another taxpayer funded bailout scheme for their very close friends at the banks and in the US financial sector at large? Without question, the regional and community banks are most at risk with current and to come CRE issues. We do not expect death and destruction as excesses in CRE lending were NEVER as egregious as what we witnessed in residential lending. But these folks will need time to heal. They will need time to earn their way out of their current and to come CRE problems. This simply tells us their will be less aggregate systemic risk taking and credit availability from this crowd of regional and community bankers ahead. It can be no other way. And yet equity investors continue to attempt to discount a “V” economic recovery, as is implicit by the recent vertical action in equities? They certainly know something we do not. They do know something, don’t they?"

[treestar]

57. Good. And a positive attitude is good for the economy.

The happiest result I can think of is 1 - the economy recovers and is great in 2010 during the election season and 2 - bin Laden is caught on Obama's watch. Can you imagine the fun with freepers that would result?