The recession is largely over……if
We called the top in oil within days of its occurring, and we feel in the mood to make another prediction. The recession would appear to be largely over, unless the Obama administration and Congress take steps to screw things up further.
AP: “The number of U.S. workers filing new claims for unemployment benefits fell last week, government data showed…a separate report from the Commerce Department showed the country’s trade deficit shrank in February to its smallest since November 1999.” Bloomberg reported that bank profits continue up and housing activity is once again increasing.
Wells Fargo & Co., the second- biggest U.S. home lender, reported a record first-quarter profit that beat the most optimistic Wall Street estimates, sparking a rally in bank shares on speculation that the industry’s slump has ended.
Net income rose about 50 percent from $2 billion a year earlier, the San Francisco-based lender said today in a statement. Per-share profit equaled about 55 cents, more than double the average estimate of analysts surveyed by Bloomberg. The acquisition of Wachovia Corp., whose overdue home loans helped cut Wells Fargo’s stock price in half this year, is exceeding expectations, the statement said.
The results add to evidence of a banking rebound after Citigroup Inc., JPMorgan Chase & Co. and Bank of America Corp. reported gains for January and February. Lenders benefited from a surge in home loans as interest rates fell below 5 percent, and President Barack Obama said today U.S. refinancings rose 88 percent in March. Wells Fargo closed $100 billion of mortgages in the quarter, with an equal amount waiting to be completed.
“There is a lot of activity at the lower end of the housing market,” Chief Financial Officer Howard Atkins said in a telephone interview. “We are a lot closer to the bottom.”
This has been a normal recession, except that (a) it was global in scope, causing an unprecedented simultaneous correction in almost all commodities all at once, and (b) the financial system was mishandled by government, not once, but twice.
The big “if” facing the economic recovery at this point is whether the Obama administration takes steps to screw things up again — given the track record so far, it is not out of the realm of possibility. It is up to the Wise Men of the Democratic Party to make sure that this does not happen.
April 10th, 2009 at 8:09 am
Perhaps a recovery this year, but how can there be a sustained recovery when the retirement of the baby boomers has programmed in a 10-year decline (or at least stagnation) in U.S. consumer spending? In order to have recovery in the face of the demographics, we would have to be encouraging export growth by encouraging new capital investment, reducing business regulations, improving labor flexibility, etc.
Such things are not in the cards, it would seem.
April 11th, 2009 at 3:46 pm
I truly hope you are right Dinocrat, but I just don’t see it. I am reading a big wave of forclosures coming in Cal. Car sales are still going down and Chrysler and GM don’t have their financial problems solved. Corporate pension funds are going to need cash infusions, sucking needed money out of businesses. States are looking at major tax increases to counter plummeting revenue. World trade is still declining. The problems in Eastern Europe haven’t been solved. I am told insurance companies are going to get bailouts. As for the banks, as I understand it, TARP money hasn’t purchased $1 worth of toxic assests and yet they are suddenly profitable. Things are not adding up, but then I am just a feebleminded old geezer.
April 11th, 2009 at 11:34 pm
It’s not even necessary for the adminstration to do anything. They will soon need to dip into the Social Security Trust Fund to pay benefits, and the only thing in it is IOUs.
Sorry kids. You listened to us. Next time, think for yourselves.
June 26th, 2009 at 10:08 am
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