Yves at Naked Capitalism, likely in the interest of a balanced approach, today presented some competing posts; one that sees a recovery in place and one that questions the green shoots we are seeing. I link them both here:
http://pensionpulse.blogspot.com/2009/06/full-steam-ahead.html
http://www.nakedcapitalism.com/2009/06/more-data-casting-doubts-on-green.html
Both are well written and worth the read. What strikes me is the divergence in focus, which I am noticing a lot these days. Those seeing the recovery in place and the worst behind us tend to look at "indicators." They see the market up as a good sign, commodities rebounding as a good sign, Paul Krugman more upbeat as a good sign and so forth and so on. What many of these articles and posts lack are analysis of data - the fundamentals. The anecdotal "indicators" can be manipulated and misread. Moreover, they might just tell you what people want to hear versus reality. If you look at the less optimistic piece posted above, it focuses on data; data on unemployment, commodities and the like. It looks at why the indicators are misleading. To me, it focuses on reality. I could be all wrong (it won't be the first time) but I prefer the data focus. In the long run, data should win.
So here is more data:
- Surveys, including a fairly reliable Manpower survey, show employers are still not planning on hiring any time soon, so they are either not buying into the green shoots theory or - as in most recessions recently - waiting until the proof is absolutely clear before hiring;http://www.calculatedriskblog.com/2009/06/weak-hiring-and-jobless-recovery.html
- Commercial real estate loans are suffering big time, which will have a significant impact on regional and local banks. Some suspect the government stress tests did not adequately allow for this;http://www.calculatedriskblog.com/2009/06/commercial-mortgage-defaults-seen.html
- While the TARP panel chair is recommending rerunning the stress tests, no way, no how. We all knew they were bogus to begin with so why repeat the sham; http://www.calculatedriskblog.com/2009/06/tarp-panel-chair-suggests-running.html
- It is hardly surprising that a lot of banks are wanting to repay the TARP funds to get the government off their backs on compensation and bonuses - especially when they can get just as much government support through PIPP and government guarantees: http://www.calculatedriskblog.com/2009/06/treasury-ten-large-banks-can-repay-68.html
- Has anyone noticed the massive debt the goverment is running up - not to mention others around the world. If you have not noticed, we also have massive health care and retiring baby boomer issues to consider. Yep, everything alright here.
Disclosures: None.
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