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Is the Economy Really Recovering?
Jay Peroni, CFP(r) The Faith-Based Millionaire


Is the recession over?

With all the news that the recession is finally over and the stock market having recovered over 50% from the March 9th low, is the economy truly improving? Many in the financial media and on Wall Street would like you to believe this is the case. However, a further reflection of what's truly happening on Main Street shows a completely different tale:

It's estimated that:

· Unemployment will hit double digits

· One in three commercial loans is on verge of default

· Payments on over one million adjustable rate mortgages are about to significantly increase

· Personal bankruptcies are up 33 %

· Business bankruptcies may increase by over 60% before 2009 comes to a close

Dead cat bounce?

Not to be all doom and gloom, but we need a little dose of reality. Did we not learn anything from the crash of 2008? Based on all the economic data, what we are most likely seeing with the stock market recovery could be what's known as a dead cat bounce. A dead cat bounce is a figurative term used by traders in the finance industry to describe a pattern wherein a spectacular decline in the price of a stock is immediately followed by a moderate and temporary rise before resuming its downward movement, with the connotation that the rise was not an indication of improving circumstances in the fundamentals of the stock.

Read the rest of Is the Economy Really Recovering?

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ORIGINAL: GroupW

BlessedInNyc is absolutely correct.

The economy does indeed appear to be recovering. Initial jobless claims have begun to head in a positive direction, the pace of job losses has slowed, and most of the other leading indicators have turned positive over the past 3 months. Home prices are rising again in most places and at least beginning to stabilize in the worst markets (CA, Las Vegas, Miami, etc.). Activity in both the servicing sector and manufacturing has picked up this quarter, and banks are ever so slowly beginning to lend again. Credit spreads are beginning to normalize in some markets, and the interbank lending environment is almost back to business as usual.

Most of the policy decisions being made currently are actually the correct response to all of this and are having roughly the expected impact at roughly the expected timing. For example, we began an expansionary monetary policy a little more than a year ago. Typically, the effects would be felt 6-18 months after inception. We should just be seeing the initial impacts currently.

That said, don't expect major improvements in the job market. Employment always tends to lag a bit - sometimes for a year or longer. It will likely feel like we're still in a recession long after we've actuallys started recovering. That's pretty normal.

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ORIGINAL: Fritzpw_Admin

Truly a disturbing article. What do you think? Is the Economy Really Recovering?

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ORIGINAL: its_GO_time

It's a house of cards: We(the USA) don't manufacture hardly anything, anymore.

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ORIGINAL: GroupW

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ORIGINAL: its_GO_time

It's a house of cards: We(the USA) don't manufacture hardly anything, anymore.

Actually this is a bit of a myth. While manufacturing employment has declined markedly, the value of the goods produced hasn't declined in similar fashion. We've just become more productive and produce the same amount but with far fewer people.

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ORIGINAL: GroupW

You translate me incorrectly. The correct translation being that we simply need fewer people to manufacture the same quantity of goods.

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ORIGINAL: GroupW

I'm certain that it feels that way, and it may well take several years to recover all the jobs lost. Just remember that it always feels this way at a bottom of a recession. It usually turns out much better than we fear.

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ORIGINAL: rlj

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ORIGINAL: GroupW

You translate me incorrectly. The correct translation being that we simply need fewer people to manufacture the same quantity of goods.

We've lost hundreds of customers to China and Asia and it has nothing to do with automation. We have shutdown 5 presses at 3 of our plants because of outsourcing or whatever. My Mom's factory has seen her workforce go down about 40% over the last decade and they run their jobs the exact same way since in her industry many of her jobs don't need to be automated. Levi's jeans, MasterLock locks, slowly GM engines, all used to be good paying jobs for people in the US now they are made overseas. Once or twice a year we hear about a competitor who shut down that we used to compete with because there isn't enough work left in the US.

I'm not buying it.

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ORIGINAL: Fritzpw_Admin

Truly a disturbing article. What do you think? Is the Economy Really Recovering?

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ORIGINAL: rlj

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ORIGINAL: GroupW

You translate me incorrectly. The correct translation being that we simply need fewer people to manufacture the same quantity of goods.

We've lost hundreds of customers to China and Asia and it has nothing to do with automation. We have shutdown 5 presses at 3 of our plants because of outsourcing or whatever. My Mom's factory has seen her workforce go down about 40% over the last decade and they run their jobs the exact same way since in her industry many of her jobs don't need to be automated. Levi's jeans, MasterLock locks, slowly GM engines, all used to be good paying jobs for people in the US now they are made overseas. Once or twice a year we hear about a competitor who shut down that we used to compete with because there isn't enough work left in the US.

I'm not buying it.

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ORIGINAL: davemiller7

The article hit many good points but it left out the increased tax burden that will soon be put on Americans by the current bunch in Washington. That will keep the economy from recovering.

The article also doesn't account for the hundreds of thousands (millions?) of people who have run out of unemployment benefits, have taken part-time jobs, or have begun their own small businesses.

The unemployment rate here in NC, which used to have one of the lowest rates in the nation, is now well over ten per cent. And that also does not take into account those I listed above. Tobacco farming has been decimated, most textile plants are closed, and many prestigious high tech corporations have left the RTP or have severely cut back their work forces.

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ORIGINAL: davemiller7

The article hit many good points but it left out the increased tax burden that will soon be put on Americans by the current bunch in Washington. That will keep the economy from recovering.

The article also doesn't account for the hundreds of thousands (millions?) of people who have run out of unemployment benefits, have taken part-time jobs, or have begun their own small businesses.

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ORIGINAL: letusreason

This (R) from TX thinks that the keynesian economics that have gone awry are actually accelerating us towards economic Fascism.

http://www.youtube.com/watch?v=8TS7Jf6XBjQ

now who will be the first to bring up past administrations instead of keeping the topic on the current economy's malaise?