Psst! This Recession Ain't Over, Folks

By now, it's common knowledge that the recession is over; Warren Buffett implied it back in September. Hold on, writes Gluskin Sheff chief economist David Rosenberg, in a commentary this week: Judging by the criteria that the NBER itself uses, that conclusion is anything but assured (the NBER is the official arbiter of recessions in the U.S.). That should be a sobering observation for share investors since it's entirely inconsistent with a powerful rally that has lifted stocks 64% from the March 9 market low.

Nailing down the recession end
The NBER views "real GDP as the single best measure of aggregate economic activity." However, official GDP results are only available on a quarterly basis, which isn't granular enough for the NBER to determine the beginning and end months of a recession. As such, the NBER also looks at monthly GDP estimates produced by Macroeconomic Advisors. While those numbers do suggest that the recession ended in June, the most recent data for the four other main indicators the NBER looks at tell a different story, with three of four lower than in the prior month:

Indicator

1-Month % Change
(Oct. 2009, preliminary)

Suggests Recession
Has Ended

Employment

-0.1%

FAIL

Personal income less government transfer payments

-0.03%

FAIL

Industrial production

+0.1%

PASS

Manufacturing and trade (wholesale/retail) sales

-0.2%*

FAIL

*September 2009 is the most recent value.
Source: Bureau of Economic Analysis, Federal Reserve, and Bureau of Labor Statistics.

S&P 500 aggregate real revenues down 9% year-on-year
Even if the recession did end in the third quarter -- which would largely be due to government spending -- aggregate revenues for the current members of the S&P 500 in the third quarter were still 9% lower than the previous year on an inflation-adjusted basis, with only one in three companies exhibiting positive real revenue growth. Among the top 5% of S&P companies on the basis of Q3 revenue growth, you'll find:

Company

Calendar Q3 2009 Year-on-Year
Revenue Growth (Inflation-Adjusted)

American International Group (NYSE: AIG  )

2,606.4%

Goldman Sachs (NYSE: GS  )

108.1%

Citigroup (NYSE: C  )

61.5%

DeVry (NYSE: DV  )

44.3%

Apollo Group (Nasdaq: APOL  )

31.5%

Amazon.com (Nasdaq: AMZN  )

29.9%

Apple (Nasdaq: AAPL  )

27.1%

Where fools rush in
Is the recession over? My guess is that it did end at some point in the third quarter, but even if that turns out to be the case, it should provide no encouragement to stock investors to pay current prices for the U.S. stock market. Indeed, investors have been bidding the market up to levels consistent with a robust recovery in the face of economic data that suggest any recovery will be weak and protracted. Don't be tempted to rush headfirst into the fray now -- steeling your nerves and remaining patient is the better course.

The new reality for the U.S. is slow growth and rising budget deficits and public debt. Global Gains co-advisor Tim Hanson urges you to get out now to mitigate those trends.

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Alex Dumortier, CFA, has no beneficial interest in any of the companies mentioned in this article. Apple and Amazon.com are Motley Fool Stock Advisor recommendations. Apollo Group is a Motley Fool Inside Value pick. Try any of our Foolish newsletters today, free for 30 days. Motley Fool has a disclosure policy.


Read/Post Comments (53) | Recommend This Article (74)

Comments from our Foolish Readers

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  • Report this Comment On December 02, 2009, at 6:22 PM, SteveTheInvestor wrote:

    I agree. The market is overpriced on average. I'm not anxious in the least to buy more stocks. In March, fear was rampant. Today, greed is rampant. And the crappy economy is still with us.

  • Report this Comment On December 02, 2009, at 6:31 PM, Bonefish100 wrote:

    ..."isn't granular enough?"

    I just love these phrases that people use to sound important, while at the same time failing to communicate their message clearly. Too bad some of us dummies don't know what it means. Oh well, I guess I'm a failure.

  • Report this Comment On December 02, 2009, at 7:21 PM, Andreason5 wrote:

    I took our money out too soon thinking there is so much bad news, it's going to tank. That was 2000 points ago. I appreciate the comment to not jump in and remain patient. I am patiently waiting for it to drop. It is artificial, it is going to DROP!

  • Report this Comment On December 02, 2009, at 7:27 PM, jimilling wrote:

    I'll venture to say the recession IS over, we are now at the beginning of a depression.

  • Report this Comment On December 02, 2009, at 7:31 PM, XMFTheNew wrote:

    Bonefish has a point...

  • Report this Comment On December 02, 2009, at 7:36 PM, TMFAleph1 wrote:

    @Bonefish100,

    The meaning should be clear from the context, but I agree it was a poor choice of words on my part.

    Best,

    Alex Dumortier

  • Report this Comment On December 02, 2009, at 7:39 PM, TMFAleph1 wrote:

    @Ryan,

    What happened to loyalty?

    Alex Dumortier

  • Report this Comment On December 02, 2009, at 7:46 PM, OPTIONNUT wrote:

    OK...So things seem to be over blown w/r to the state of economic recovery. However, look at where prices were inthe March 09 drop and how many stocks are still under water. Get your head out of the sand and look at companies like AZMN, APPL, and CRM....get rid of your dogs and move onward!

  • Report this Comment On December 02, 2009, at 7:48 PM, OPTIONNUT wrote:

    On more comment...if you really think a depression is coming in 2010 get in to Gold indexes or options...stop whinning!

  • Report this Comment On December 02, 2009, at 8:25 PM, thisislabor wrote:

    Hi,

    Im America, and about 20% of the time Im still out of job. But hey, on occassion I think depression isn't so bad. I'm sure when I find work more like 95% of the time, I'm sure by then I'll be feeling better.

    Tell next update,

    America.

  • Report this Comment On December 02, 2009, at 8:36 PM, jm7700229 wrote:

    There's only one real measure of the upturn of the economy: industrial production. The other 3 are all lagging factors. They should catch up in the next quarter or so if the recession has really turned.

    I still expect an investment to have great prospects, great management, a significant moat, usually a dividend and a P/E under 12. And I find more than I can handle.

    I don't know CRM, but AMZN and APPL are clearly and grossly overpriced. So is gold.

  • Report this Comment On December 02, 2009, at 8:40 PM, jerryguru69 wrote:

    "...investors have been bidding the market up to levels consistent with a robust recovery in the face of economic data that suggest any recovery will be weak and protracted."

    I agree. I also had the same thought about gold @$1200 and oil@$80. These do make sense, but only when inflation and GNP growth is +5% and above. People keep screaming 'weak dollar'; perhaps, but would not this, like a weak yuan, boost exports and give GNP a shot in the arm?

  • Report this Comment On December 02, 2009, at 8:54 PM, xetn wrote:

    GDP is a worthless stat because it contains government spending. The government does not create wealth; it only takes wealth by force and gives it to others. Therefore, it is not productive use of capital and actually destroys capital formation for the private sector.

    How exactly, can anyone believe that the recession is over, when we are still shedding jobs, there are maybe 500 banks that will fail in the coming months, and foreclosures of homes and commercial properties are still looming?

    Most of the increase in industrial production was a result of government subsidies ("Cash for Clunkers").

  • Report this Comment On December 02, 2009, at 9:16 PM, jomueller1 wrote:

    Love all your comments. Coming from a country where relatively few people own stocks and bonds I look at this murky water full of sharks and I wonder how one can survive.

    Besides all the statistics about gains in this or that I never saw data on how much hard (or less hard) earned money was put to work and ended up in the hands of scavengers, cheaters and parasites. Please tell me: For every 1000 dollars that people invested nnn dollars are still with them. If people have on average fewer dollars in their pockets they are the losers and should get out. The rest has to live on REAL growth.

    One more thing: The whole financial "industry" is in place to separate fools from their money and is therefor the real "evil empire". The financials produce nothing, they just "transfer" wealth. Yet their cash flow is considered GDP - what a joke!

    So where do the lemmings go next? May be do the opposite of the housing bubble. They should have sold then and now it is time to buy. Population growth is with us as long as immigration is not stopped.

  • Report this Comment On December 02, 2009, at 11:29 PM, thisislabor wrote:

    actually I'm not so sure one can honestly say that the "whole" financial empire is a waste of money and doesn't contribute to GDP.

    same goes for government spending.

    but you have a point nonetheless jomuller1, we do need a statistic for measuring GDP//GNP w/o facturing in either government spending or money from non-profits.

  • Report this Comment On December 03, 2009, at 12:38 AM, holosys wrote:

    Just because we reached the bottom of this economic cesspool doesn't mean the government is incapable of drilling deep into the sludge.

    If you recall the three waterfalls that Indiana Jones and company rode out in the latest Spielberg extravaganza, you might say we've survived the first waterfall. Everyone is breathing a sigh of relief, unaware that roaring sound is more falls just ahead.

  • Report this Comment On December 03, 2009, at 12:40 AM, holosys wrote:

    Just because we reached the bottom of this economic cesspool doesn't mean the government is incapable of drilling deep into the sludge.

    If you recall the three waterfalls that Indiana Jones and company rode out in the latest Spielberg extravaganza, you might say we've survived the first waterfall. Everyone is breathing a sigh of relief, unaware that roaring sound is more falls just ahead.

  • Report this Comment On December 03, 2009, at 5:27 AM, georcole wrote:

    @Alex,

    If you reread Bonefish's post, he didn't understand the meaning. I fail to see how your reply gave him that meaning any more clarity.

    As to the loyalty response to Ryan, while it seems like a joke, after giving a useless response to Bonefish's post, I don't feel that the joke was warranted. Maybe you should've sent that to his work email or some other method that doesn't include sounding insensitive to your reader.

    As to the definition of granular, this is what dictionary.com has to say:

    gran⋅u⋅lar  [gran-yuh-ler]

    –adjective 1. of the nature of granules; grainy.

    2. composed of or bearing granules or grains.

    3. showing a granulated structure.

    So you would have to say that that the the GDP only comes out quarterly, which is not frequent (broken down into small enough pieces, or into enough grains) to find out which month the recession ended.

    @Bonefish100,

    I hope that the definition is more clearly stated than it was in Alex's inadequate response. I'm sorry that he didn't even attempt to answer your question and instead called you stupid by saying that the meaning should be clear after you just told him that it was not. It was uncalled for and insanely unprofessional.

  • Report this Comment On December 03, 2009, at 6:07 AM, sofpan wrote:

    Nice article!

    I believe gold is the best hedge for this system failure and inflationary or deletionary depression.

    Stocks have risk.

    You can buy a very good company with a great growth potential and can report losses. Take YONG for examble: great company, great potential but resulted losses in the last quarter (not operational, but losses).

    Gold is not producing added value but it conserving the best way real value of inflating money and sriralling increasing Debt.

  • Report this Comment On December 03, 2009, at 7:18 AM, drericrasmussen wrote:

    The recession is over but I do hope Mr. Dumortier keeps writing these articles screaming, "bail, bail, bail!" The more he can convince investors to bail the cheaper I can scoop up winners. It has been a very good year and November was actually far better for my portfolio than I expected. Thank you, Mr. D and keep up the sloppy work.

  • Report this Comment On December 03, 2009, at 7:31 AM, idrive2026 wrote:

    Young people with a whole life ahead of themselves should be buying hard assets right now!!! Buy a house, buy good stock indexs; 70%U.S., 10%Chinese, 10%Brazilian and 10%India.

    Do whatever it takes to make your house payments and keep maxing your retirement plan contributions to the best of your abilities. Never, ever over spend on anything and stop wasting your money on lattes and new cars. Think of every dollar as if will be among your last. Invest!!! Live simple and be happy. Only borrow for things that will grow in value over time. Struggle for the rest.

    Depressed prices and low interest rates make today a once in a lifetime opportunity for a house. Inflation almost guarantees a higher stock market over your lifetime. If the dollar drops further, it will make U.S. assets look more attractive to foreigners. If the dollar gets stronger it'll be even better. You should then thank capitalism.

    Don't be a sad fool and miss out. "Plan for tomorrow but live for today". Your parents did it. You can too!!!

  • Report this Comment On December 03, 2009, at 8:05 AM, BigPowerAl wrote:

    Guys

    0.1% on any economic data - especially the big ones is noise. How accurate do you think they are? Especially when they are sometimes revised by over 1 % the next quarter or reporting period? It always amazes me how people get down to the tenths of percent on numbers that aren't debatedly accurate or representative of the "true" number at all.

  • Report this Comment On December 03, 2009, at 9:47 AM, XMFTheNew wrote:

    Alex,

    I only wanted to make sure you responded to Bonefish. Because you had a lot of really good data but we were hazy on your overall conclusion. So, it wasn't "clear from the context."

    I, like other Fool.com readers, clicked on this article in Fool Watch Daily because it caught my attention and it's a pressing issue right now. But after reading it, I wasn’t sure what your conclusion was.

    As for loyalty, my only agenda was to press you for more information (albeit in a simplistic manner… I really just wanted to add weight to Bonefish’s comment).

    I would say it's more Foolish to challenge each other to dig deeper, than to accept each other’s work as fact. And I would take it a step further and say loyalty in a commentary medium undermines the true purpose of the Fool community.

    Granted, my 4-word comment, does come across differently than I intended. So, I apologize for being gruff.

    - TMFTheNew

  • Report this Comment On December 03, 2009, at 9:56 AM, TMFAleph1 wrote:

    @Ryan,

    I accept (and appreciate) your apology.

    By "clear from the context", I was referring specifically to the meaning of 'granular'.

    As far as my overall conclusion goes, it is contained in the final paragraph. What it that you don't find clear, specifically?

    Alex Dumortier

  • Report this Comment On December 03, 2009, at 10:07 AM, devandev wrote:

    Alex,

    I thought your use of the word granular was clear and appropriate and quite frankly rather obvious within its context. If people can't use dictionary.com to look up simple 12th-grade words and derive the applied meaning, you shouldn't have to apologize to them.

  • Report this Comment On December 03, 2009, at 10:24 AM, TMFAleph1 wrote:

    @devandev,

    Thanks for your support -- I appreciate it!

    Alex Dumortier

  • Report this Comment On December 03, 2009, at 11:52 AM, hookerslice wrote:

    A plea to Alex, and all TMF authors/writers,

    Please do not use acronyms without proper identification at their first use. I believe I counted NBER six times in this article. What is NBER? I can guess, of course. But perhaps National Bureau of Economic Research is inaccurate.

    My brain cells (the few with which I was endowed) are dying. I can no longer remember the particulars or the intricacies of split infinitives or dangling participles which were taught to me in the eighth grade and I find myself required to guess far more often than I would prefer.

    I enjoy reading most of the articles that I encounter in the FoolWatch. If I am interested in a comment or a conclusion which I cannot understand, either for lack of clarity or due to my own intellectual shortcomings, I show my respect for the author by inquiring as to his intent (as did Bonefish 100).

    I applaud his diligence and respect in requesting clarification. As for NBER, it was not "...clear in the context...", and as for loyalty, I would think one must refer to some ancient text for an understanding of such an obscure, arcane and forgotten concept.

    Fool On!

  • Report this Comment On December 03, 2009, at 2:57 PM, Ironbob wrote:

    There is no way in hell that even a beginning of a recovery can be claimed with over 10% unemployment. That's freaking idiotic.

  • Report this Comment On December 03, 2009, at 2:59 PM, Ironbob wrote:

    Whenever a union worker gets laid off, an angel gets its wings.

  • Report this Comment On December 03, 2009, at 3:04 PM, Celtics17 wrote:

    Obama and the Dumbocrats are trying to bankrupt the country. This country better wake up before it's too late.

  • Report this Comment On December 03, 2009, at 5:21 PM, georcole wrote:

    @Alex,

    I agree with devandev in that Bonefish is fully capable of looking up words in dictionary.com. I use that site all the time for either definitions or spelling. I was simply questioning why, after a customer/potential customer questions something and you took the time to respond, did you not respond in an appropriate manner. At the top of every page on TMF it says "To Educate, Amuse & Enrich". While I enjoyed this article and was able to be educated, amused and enriched by it, I think you missed an opportunity to work on the educate part in the case of Bonefish.

    I read almost every article in Fool Watch Daily on a daily basis and then click on the tabs at the top of the page to see what other articles look like they might be of interest to me. I spend approximately two to three hours a day on Fool.com between the articles, CAPS and investigating companies for potential investments. I love this site and am very happy that it exists. I recommend it to my friends and family all the time. I have learned tons of information from all of the writers here, and I fully intend on learning far more as time goes on.

    I have it in my head, right or wrong I do not know, that the writers get paid based on comments and recs. While I very rarely have anything to say, I will rec an article if I enjoyed and learned from it. I usually rec four to six articles a day due to my belief that it affects your pay and also it is a way of letting you know that I appreciate your work. So please continue writing articles that live up to the Fool motto, but please try to work on the customer service part of the job.

    Fool On!!

  • Report this Comment On December 04, 2009, at 2:10 AM, mrcumming wrote:

    Good Morning America!

    Be smart, Buy ETF,S BRIC,S, property in other countries with less problems that actually have some good things happining for them, ie, good GDP growth alot of house for the money, low taxes, property appreciation in the future, low medical insurance cost, friendly people, less crime- mostly petty.

    OR wait I forgot buy some S & P PUTS for Jan.2011, I think Obama and his crowd will surely cause the market to crash by then!!

    GOOD NIGHT AMERICA!!!

    FOLLOW THIS PLAN AND YOU CAN SLEEP IN PEACE

    THANKS

  • Report this Comment On December 04, 2009, at 10:13 AM, Celtics17 wrote:

    Not a bad idea, mrcumming.

  • Report this Comment On December 04, 2009, at 1:29 PM, JoeBtsflk wrote:

    Unemployment figures now have been revised upward, so does that improve the score to PASS=2, FAIL=2? As mentioned above, unemployment is a lagging indicator, and so more useful for marking a recession after the fact than for investing. So, I agree that recovery is likely happening. The market recovery does seem way more impressive than the projected economic recovery. The thing is that the market lows were priced for the Apocalypse, which has since been cancelled. So, I don't know whether the market is overpriced or not. I'm still down over the past couple of years.

  • Report this Comment On December 04, 2009, at 1:30 PM, GinaDewildt wrote:

    @ mrcumming

    What is S BRIC?

    Thanks for the tips.

  • Report this Comment On December 04, 2009, at 2:18 PM, bretcomar wrote:

    georcole,

    IF Alex's response to bonefish comes across as a little haughty (to me it didn't, but I can see how it might have to others), wasn't bonefish's initial comment much more rude and aggressive? A question is fine, but why ask it in such a mean way? If he's participating in this forum, Alex can surely stand some rough play, but then bonefish should be able too as well (and again, I didn't think Alex was nearly as rough as bonefish).

    If you want to argue that bonefish is the customer and purely as a business decision Alex should have responded differently, I take your point but it doesn't make me any more sympathetic to bonefish than I am to diners who express displeasure with wait staff by yelling in the restaurant.

    Thinking about this as a question of how what could have been a friendly or at least neutral and probably brief exchange between two people instead turned into a peevish and time-consuming (but enjoyable) debate among half a dozen posters...well, based on a survey of imaginary three-year olds, bonefish started it all.

  • Report this Comment On December 04, 2009, at 2:43 PM, franksmartin wrote:

    So now the Fool is into market timing? LOL

  • Report this Comment On December 04, 2009, at 2:51 PM, dmarq773 wrote:

    Wow, these are some interesting comments. I just joined Motley Fool and am trying to asses whether or not there is sufficient value to stay a member. So far, from the materials I have reviewed, to this article - and particularly the response from the author - I'm under-impressed.

    An author should be clear and if questioned, respond with detail - not the snobbish suggestion that the reader just didn't get it. Adult learning 101 teaches that much!

    Alas, if Motley Fool writers can provide quality service - why remain a member?

  • Report this Comment On December 04, 2009, at 2:52 PM, dmarq773 wrote:

    Wow, these are some interesting comments. I just joined Motley Fool and am trying to asses whether or not there is sufficient value to stay a member. So far, from the materials I have reviewed, to this article - and particularly the response from the author - I'm under-impressed.

    An author should be clear and if questioned, respond with detail - not the snobbish suggestion that the reader just didn't get it. Adult learning 101 teaches that much!

    Alas, if Motley Fool writers can provide quality service - why remain a member?

  • Report this Comment On December 04, 2009, at 2:56 PM, Littlengine wrote:

    As I drove to work this morning I listened to programs on both CNBC, Bloomberg and CNN (name your network) – the exaggerations and positive spin generated by the latest jobless claims data were nauseating. Given the flaws and outright errors in the data collected to compile some of these statistics, it would seem that folks would be a little more guarded in trying to explain what they mean. If the economy was a patient in the hospital surely it would be listed as in critical condition, with severe internal bleeding and multiple organ failure. Unlike the nonsense being broadcast and printed as we speak, everything is not going to be okay. There is story after story of people who have stopped looking for jobs because there are none – at least not where they live. Others who have lost their jobs are now sentenced to permanent part-time jobs – in one case I read about a man in his 40’s who has to work three part-time jobs just to earn half of what he used to make – I am sure he doesn’t give a popsicle about so called improvements in the unemployment rate or the stupid Black Friday sales. It’s Black Friday all right as idiots are brain-washed into parting with whatever pennies they manage to have left. Back to the point, this gentleman and others like him who are stuck in a cramp hole do not feel proud of their contributions to helping reduce the unemployment rate. Or perhaps the office worker who now has to do the job of 5 of their colleagues who have been laid off feels a sense of higher self-esteem and accomplishment – they might feel better if someone slapped the labor statistics out of some of these talking heads on TV and Radio and in DC. Perhaps well paid television and radio types and the various ignorant spokespersons find it hard to believe that this is really happening to people – they are way too high and mighty to be believed. It goes without saying that I would never make any stock investment based on information from these blabbering caviar eating idiots. Perhaps they think denial and pretending everything is okay helps make people feel better, even if the economy is in the intensive care unit for the next few years. We use the term Fool affectionately amongst ourselves in this forum, but we should not overlook the fact that there are actually some real ones out there. I could go on, but I think that's enough for now.

  • Report this Comment On December 04, 2009, at 3:16 PM, Dee154 wrote:

    I hear and read all the talk about the "recession" being over. I am still working for a living, and still trying to figure out where the people get their figures from as far as the recession being over. The recovery will happen but I don't believe it will be anytime soon.

  • Report this Comment On December 04, 2009, at 3:52 PM, Aveneljp wrote:

    While everyone continues to worry about the state of the economy, the market will continue to quietly make gains. Once we finally reach that nirvana when we are all agreed that the sky is now blue, the economy is at last on track and our investing future is secure, that's the time to be really nervous.

  • Report this Comment On December 04, 2009, at 4:05 PM, LAVol wrote:

    The stock market anticipates and thus precedes recovery. I'm in the camp that thinks this is a "V" shaped recovery and the best may be yet to come. We are still well below historical highs. The recovery immediately after the market crash of '29 lasted 5 years and the market rose to over 5X the market low, even though unemployment remained incredibly high. However, if the Health Care Bill passes the Senate, all bets are off.

  • Report this Comment On December 04, 2009, at 5:07 PM, Margin5 wrote:

    @ Littlengine

    Why don't you tell us what you really think:o)

    I agree with everything you said, among the best posts I read here today. I know exactly how you feel, listening to bobbleheads practially giddy obout "less bad" statistics. The guy you mentioned is not counted in the official unemployment numbers, but then neither are the tens of 1000s that drop off the unemployment rolls each week, having exhausted their benefits. And what happens to the numbers in 3 weeks, when retailers release all the recently hired seasonal help.

  • Report this Comment On December 04, 2009, at 5:28 PM, michaelaknight wrote:

    @Aveneljp

    Quite possibly the only sane opinion in this thread.

    Thank you.

  • Report this Comment On December 04, 2009, at 5:30 PM, lizard8080 wrote:

    Wake up America!!! The way we calculate GDP does not reflect shape of the economy. The first: service sector accounts for a big part of the American pie. In that particular sector every activity associated with money tranfer (transfer only) is being counted (sometimes twice) thus inflating the final result. The second: I aggree with jomueller that the financial "industry" which is a big GDP generator is a joke. Shuffling money does not create any value. In other words saying "Lets make some money" at Goldman Sachs makes no sense at all. The third: America's top manufacturers are tired with developing and making a good products (look GM example). It is easier and cheaper to order them from China and focus on accounting tricks inflating the value of sales and thus GDP.

    The conclusion: I personally believe that with applying better measurements of the GDP we may find out that China's GDP (officially 4.4 trillion) is actually higher than USA (officially 14 trillion).

  • Report this Comment On December 04, 2009, at 9:00 PM, Matt8265 wrote:

    When the PE of the S&P is over 22, (as it is now) it ain't no time to be buying anything. Time to be selling!

    When sales at JCP's (the people's store) is off 7% YOY after a 10% decline a year ago, it ain't no time to be buying stocks.

    Barry, Tim, Ben and Lord knows GS all want to suck you in, before then dump. The time is close.

  • Report this Comment On December 04, 2009, at 9:28 PM, 7billings4 wrote:

    Wow, it's all speculation and speculation is just that, worth every penny you don't pay for it. Each of us gets to make our best guess and take our consequences. I may move some of my money into bonds at this time, but, in truth, I don't have the faintest idea what I am doing. However I sold at the top of the market, bought 6% CDs and started buying back in March. Thank goodness, I don't know what I am doing.

  • Report this Comment On December 05, 2009, at 12:35 AM, georcole wrote:

    @bretcomar

    I think that bonefish sounds depressed. He calls himself a dummy and a failure. Neither one of those things sound like something a person would yell at another person.

    I do agree that bonefish's "question" does sound much ruder than Alex's response. I also agree that if he had a question about something, he could have left out the insulting first part and just asked his question in a mature manner.

    I still feel that Alex's response did not answer bonefish's question. By saying that the meaning should be "clear from the context" he did not answer the question in the slightest. With Alex being a writer, he probably has a larger vocabulary at his disposal than most of his readers. After all, he works with words everyday and so is better at using them, in a similar manner that a butcher has better knife skills than the average person who buys the meat. Sometimes he might not realize that he worded something in a way that was somewhat confusing.

    We are all adults on this site, for the most part, and should have tough enough skin to take a little roughness, I agree. But the author of an article should treat his readers with a little more courtesy. Like answering the question. He could have been very blunt about the answer, or ignored it altogether as he has my comments. Either is fine with me. Since he took the time to respond, I still feel that he should have answered the question. I feel strongly that somebody should point out bad customer service, which I feel that Alex's response is.

    I do agree with your entire last paragragh, including bonefish starting this whole mess. I also find it humorous that he is probably not even aware that this whole conversation is even taking place.

  • Report this Comment On December 05, 2009, at 6:46 AM, manishkumar wrote:

    Stocks are purchased using dollars. More dollars out there --> stocks had to go up. The correlation to the economy is limited. But then we buy stocks not the economy.

  • Report this Comment On December 05, 2009, at 12:55 PM, sccoast1700 wrote:

    Unemployment rates are the leading indicator of when the recession will end. The employed will hoard cash and the unemployed will have no money to spend. Nothing will happen until this improves.

    As for stocks, why get out. There are good buys even in a poor market.

  • Report this Comment On December 05, 2009, at 10:37 PM, BanksClaw wrote:

    I don't think it is over. I believe this is another little bump. We had one in 2008. This bump might be bigger but anyone who is catching on to what's going on here could tell this is most likely going to get worse. GM's not even close to liquidating its abandoned brand and factories with Saab and possibly Hummer also coming up to bat. Chrysler has yet to see a major recovery in sales even when put against the terrible figures for November. Fiat was not willing to put money so they probably will not bail it out because they simply can not. The government is also unlikely to save them from bankruptcy yet another time.

    No one will want to buy Chrysler after all that has happened and them going down brings this all back.

    We should also keep an eye on retailers. Major department stores like Macy's, Saks, and Bon-Ton all have serious risks of bankruptcy. Stores like Sears and K-mart as well. Sears especially since it has such a bad reputation. Consumers have rejected stores when they were in bankruptcy, we saw it clearly with Circuit City. You also have stores like Borders, Office Depot and Officemax to worry about.

    The risk is not so much in filing bankruptcy but the potential to move into liquidation. Office Depot, Officemax, Borders, Saks, and Bon-Ton all pose a serious risk of suffering that fate. Sears going down could bring K-Mart down with it and there is a very real risk with them failing because Sears is a major anchor store. If Macy's goes into bankruptcy they might manage to get out with debt reduction. Their name is not as badly maimed as Sears and K-Mart. However, if Macy's fails to get out as well then you're talking disastrous systemic risk.

    We all know commercial real estate is bad, but if you take away two major anchor stores at the same time all these underwater commercial mortgages come due, there is no way those are going to get refinanced. You look and almost every major mall has a Sears or a Macy's. A large number have both. Some only have both. You take away anchor stores you set the mall up for a major loss of revenue. There is simply no way all that space can be filled or even a significant fraction.

    Let us not even get into the potential losses by suppliers. Our economy depends on a strong retail industry.

  • Report this Comment On December 07, 2009, at 9:46 PM, jaderdavila wrote:

    what americans call recession is the new normal

    the old normal is the factory functioning

    the factory that went to china wont come back

    this is a jobless recovery

    johnny better ask his granma

    how to make that old recipe of apple pie

    make it and go out the street selling it

    because the blue collar he wont use anymore

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