Is the US in a Recession?

I was reading that Gary Shilling says the US is in a recession in the first quarter of 2012. He believes that there is a global recession right now, and that it started in Europe and is heading here.

My thoughts are that there have been lots of folks predicting gloom and doom for the last couple of years. Especially since Europe has been dealing with debt and as the US struggles with sluggish growth.

In the US, we are starting to see better economic numbers. We're now seeing the jobs numbers pick up, too. Meanwhile, inflation indicators remain low and allow the Fed to continue to keep rates low. One of the biggest booms for the US economy going forward is the ability for homeowners to lock in historically low interest rates. Money not sent to the banks in mortgage payments is money in folks' pockets.

posted from Bloggeroid

posted from Bloggeroid

Meet the New Recession Catalyst

Meet the new recession catalyst, same as the old recession catalyst: oil.

Yes, indeed. Here we sit, still relying on crude, and not doing much about it. Has President Obama done anything to reduce America's dependence on oil? Did President Bush before him? Or Clinton, Bush I, or Reagan? No, no, no, no and no.

I hope I got enough noes in there. You get the idea.

We have lots of natural gas available right here that could be used in a new fleet of flex-fuel natural gas cars. At least Honda has a natural gas Civic on the market.

Well, if we are facing $4-5 gasoline, then Obama is going to get a second recession in his first term. And that'll flush hope and change down the drain. The stock market cyclical bull market will end, and the secular bear trend will resume.

I was hoping we would see SP500 hit 1500 before 666 again. I don't know. Seems like things are lining up, though.
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Still long with beta under 1. Also own some oil plays, which are moving up.

In week two of bodybuilding. More on an Audioboo to come...

Weekend at AIG's

• Listened to Dennis Miller quip on $AIG at lunch, and he said the government is propping AIG up like Weekend at Bernie's, moving the arms around, etc.
• I can't say anything positive about the market.  It's a better buying opportunity today than it was on Friday.  How's that?
• Did you want to read Warren Buffett's annual letter to shareholders?  Funny, when you open the letter there's a soundtrack with it.  Tom Petty's "Free falling."
• Even Dr. Doom is scared.  In sum, Buffett and much of the rest of humanity are just now coming around to Nouriel Robuini's way of thinking, the economist known as "Dr. Doom" is upping the ante on his longstanding bearish views. A year ago Roubini was forecasting an 18-month recession with a U-shaped recovery; now, he's now expecting the downturn to last at least 24 months and possibly 36-months. He also sees rising risks of a Japanese-style L-shaped stagnation, i.e. a prolonged period with little or no economic growth.
• How much lower can the market go?  How about SP500 of 460.  Yikes.  Of course, the big bear predictions usually get bigger and more bearier as we go down.
• I go to leaf for lunch, and it's pouring cats and dogs outside!  And I left my umbrella, ella, ella at home.
• Jimmy Fallon debuts on Late Nite... Tonight!

(Oh, another pic of Lee Hyori. Embedded the U Go Girl music vid yesterday. So you know.)

Is the Worst Over?

The stock market is behaving better. The rallies are coming on stronger volume and the selloffs on lighter volume. The market bottom has held, and each attempt to start a new bear leg down has failed.

The news headlines continue to be poor. But that is to be expected during the early stages of a bull market. Employment is a lagging indicator. And government revenues, especially at the local level, will continue to be poor for the next few years. But early signs of a recovery may be showing up at retailers and restaurants.

Consumers have more money in their pockets now that gasoline is under $2. That's almost a $3 drop from the peak back in early Summer. I believe that high energy prices was a major contributor to the consumer cutting back on spending. Now the stimulus package that keeps on giving is lower energy prices. 5 year lows on gasoline? Nice!

Of course, it may not be clear sailing for the stock market. Remembering how the 2000-2 bear market ended, we saw a low in September 2002 and then rallied, but then retested the lows in March 2003. Could we see something similar?

The things I could see derailing an economic recovery at this point are increasing taxes, coming down on free trade, and increasing regulations. President-elect Obama has reversed course from his campaign promises and seems unwilling to raise taxes on the rich and wants to cut taxes for the rest of the folks. He's also said he no longer favors an oil profits tax. My guess is that with the folks he is surrounding himself with, he'll keep free trade alive.

I remain bullish. I think this is just a recession and though it is worse than the last one, we will come out of this. We may have already.