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"The Bottom" in pictures



June 29, 2009 – Comments (5)

Many people have been saying lately that the economy has bottomed and that recovery is right around the corner.  I think that these people are half right.  After falling off of a cliff at the end of 2008 and the beginning of 2009, the deterioration of the U.S. economy has slowed dramatically.  I clipped four excelent charts containing data from last week from my free three day trial of Bespoke that show evidence of this bottoming process:

The Richmond Fed Manufacturing not only came in stronger than analysts were expecting, but it was actually positive.  This is the second highest manufacturing reading that we have seen since the recession began.

While weekly jobless claims came in slightly worse than expected last week it's tough to dispote that they seem to have topped out.

Home prices are still falling, but sales of existing homes have finally started to rebound.

Consumer Confidence also came in better than anslysts were expecting last month.  May saw the third straight year-over-year increase in confidence.  Increases in consumer confidence are rare during recessions.  This is the first time that three consecutive positive readings has ever happened in the middle of an official recession.

While I don't think that the recession is over yetI do think that we have reached the bottom of a Fat "U" or "L" shapped recession with a very, very slow recovery.  I still think that stocks are ahead of themselves at this level, that earnings will be weak and future growth slower than we have become used to, but that we're not all doomed like many believe.

My oldest son is home sick from school today, so I'm off to go color some pictures. Perhaps I'll sign on later tonight.


5 Comments – Post Your Own

#1) On June 29, 2009 at 5:16 PM, gunark (86.49) wrote:

But alstry said the end times were nigh? wtf?

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#2) On June 29, 2009 at 5:37 PM, portefeuille (98.76) wrote:

to see that it does not take a recession to make the stock market interesting have a look at this chart comparing 1987 (starting with january, nasdaq 100) to 2009 (starting march 9, s&p 500, in green)


(from comment #29 here.)

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#3) On June 29, 2009 at 7:55 PM, Entrepreneur58 (37.45) wrote:

Home sales always go up in the Spring, but basically, you are right.  Spending is about to go parabolic as people get out of cash and buy goods before they skyrocket in price.  It costs $22 thousand to make a Camry today and they are selling them for $19 thousand.  How long do you think they will stay below the cost of production?

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#4) On June 30, 2009 at 2:56 AM, uclayoda87 (28.73) wrote:

Maybe consumer confidence went up because as people started saving money (and spent less) they found that they could survive and be happy with less consumption.  With this new revelation, they became more confident about their future.

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#5) On June 30, 2009 at 7:22 AM, dbjella (< 20) wrote:

 Entrepreneur58  How do you know that it takes $22k to make a Camry?

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