First - the United States will lead the developed economies out of recession in Q3 of 2009. The equities markets will start to predict this in mid-Q1 2009. (Remember that stock markets are leading indicators and labor markets are lagging indicators. The unemployment rates will lag the return to growth by many months.)
The return to growth will be weak at first (maybe 1 percent in all of 2009) but will pick up speed in 2010 as the Federal Reserves money printing takes hold. (I just looked at the Monetary Base numbers for 2009 and the almost-no-growth line up until August 2008 has been replaced with positively explosive growth since then. The Federal Reserve was truly asleep at the wheel regarding the Monetary Base this year --- but at least they seem to have awakened now. http://www.federalreserve.gov/releases/h3/Current/)
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I'll hold to these predictions with this one change: My prediction for a market move starting in mid-Q1 2009 was wrong. It is now mid-Q1 2009 and the Dow is, in fact, still declining. I'll push this out to the end of Q1.
Now - as a libertarian - here is my lament. The US government appears to be making matters worse but it's not my purpose here to deconstruct things like housing plans, stimulus plans, etc. The normal mechanisms like the Federal Reserve appear to be working properly but the stimulus plan and the still-existing zombie monstrosities like Fanny Mae and Freddie Mac will, in fact, delay a recovery. Instead of a true rebound, I think we're in for a multi-year walk along the bottom with a slow ascent that won't feel like a recovery to the average Joe on the street
The return to growth will be weak at first (maybe 1 percent in all of 2009) but will pick up speed in 2010 as the Federal Reserves money printing takes hold. (I just looked at the Monetary Base numbers for 2009 and the almost-no-growth line up until August 2008 has been replaced with positively explosive growth since then. The Federal Reserve was truly asleep at the wheel regarding the Monetary Base this year --- but at least they seem to have awakened now. http://www.federalreserve.gov/releases/h3/Current/)
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I'll hold to these predictions with this one change: My prediction for a market move starting in mid-Q1 2009 was wrong. It is now mid-Q1 2009 and the Dow is, in fact, still declining. I'll push this out to the end of Q1.
Now - as a libertarian - here is my lament. The US government appears to be making matters worse but it's not my purpose here to deconstruct things like housing plans, stimulus plans, etc. The normal mechanisms like the Federal Reserve appear to be working properly but the stimulus plan and the still-existing zombie monstrosities like Fanny Mae and Freddie Mac will, in fact, delay a recovery. Instead of a true rebound, I think we're in for a multi-year walk along the bottom with a slow ascent that won't feel like a recovery to the average Joe on the street
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