Is the Recession Over?
Source: http://feedproxy.google.com/~r/ContrarianProfits/~3/14KvVexqm-U/19919Posted on Friday, August 14th, 2009 | In Market Commentary
Is this leg of the Great Recession over? Or has the government duped us yet again?
Capacity utilization inched up a few tenths of a percent in July, the Fed proclaimed today. American companies utilized 68.5% of their productive potential, up from June’s record low of 68.1%. We have a particular affinity for this D-list data point…aside from measuring our collective utility, it’s a worthy economic indicator:
So is this it? Despite so many other feelings to the contrary, is the recession (as we know it) over?
The reason behind capacity utilization’s meager rise provides the best answer: July’s improvement was driven entirely by auto manufacturers coming back to life. They had to bump up production 20.1% to keep up with the initial response to “cash for clunkers.”
Even though it’s not legit, we wouldn’t be surprised if we are at or near the technical end of this recession. Between all the government stimuli and manipulation, the political pressure on the current administration to “do something,” this massive bear market stock rally and Uncle Sam’s inclination to fudge economic data…would you really be surprised if this thing ends in theory long before it’s over in practice?
Of course, the National Bureau of Economic Research (NBER) will be of no help. Having no interest in real-time forecasting, they won’t officially call an end to this recession until it’s long past. It took until December 2008 to tell us that this whole mess started in December 2007. Heh…by the time the NBER calls an end to this one, we might have begun another.
Source: Is the Recession Over?
Last 5 posts by Contrarian Profits
- The Best Energy Investments in the World - November 23rd, 2009
- Transportation Sector: powered by recovery - November 23rd, 2009
- The Dollar, the Euro, and being Bullish on Gold - November 20th, 2009
- Audit the Fed – Amendment to a $200 billion bill frightens currency traders! - November 20th, 2009
- What if They Stop Buying our Debt? - November 19th, 2009
contrarian profits, Federal Reserve System, Market Commentary, National Bureau of Economic Research
ContrarianProfits.com is a financial news and opinion website with a twist. As investment guru Rick Rule puts it, “You are either a contrarian or a victim.” In the financial world, most people are losers because they just don’t know what game they’re playing. They think they can just get “into the market” along with everyone else, do what everyone else does, and they will make money. Not likely. By the time you’ve paid commissions, spreads, fees, taxes – and suffered the consequences of inflation – you’ll be very lucky just to have as much money as you started with.
ContrarianProfits.com is a contrarian site, in the sense that we provide ideas, opinions and recommendations that often run counter to the mainstream financial press. We do this not just to be contrary, but because we’ve realized that Rick is right. You don’t make money by following the crowd; you make money by leading it.
Why is this so? Well, it’s obvious that if you do the same thing everyone else does you’ll get the same results everyone else gets. On average, and over the long run, real investment returns for the typical investor cannot exceed the rate of growth of the economy itself. Everybody can’t get richer faster than everybody else. Real economic growth in the US today averages about 3% per year; if you don’t make any mistakes, that’s about what you can expect. Few people may be satisfied with 3% per year, but most feel comfortable in the middle of the financial herd and are happy to take whatever that gets them. If you’re one of those people, you will probably not like our site. It will make you uncomfortable.
If, on the other hand, you’re willing to look at things a little differently, you’ll appreciate the views of many of our columnists, contributors and visionaries.
No recommendations, either expressed or implied, are being made to buy, sell, hold or short any of the mentioned stocks. No legal, tax or accounting advice is expressed or implied. Always contact your attorney, CPA, or tax advisor before acting on any legal or tax issues. StraightStocks.com is not responsible for the content, products, or services of any of the advertisers on this site. StraightStocks.com receives compensation from advertisers on this blog. Services and products referred to herein are trademarks, registered trademarks, servicemarks, and/or registered servicemarks of their respective trademark or servicemark owners.