So where are we now in the 19th month of the recession/depression? Perhaps not where we expected we’d be. The Dow finished its best gain for July since 1989. The index was up 8.6%. The S&P 500 also had a good month. It finished up 7.4%. 

Boosting stocks, of course, was “better-than-expected” news about US GDP. This was typical second derivative stuff: the pace of decline slowed, but the figures were still heading in the wrong direction. According to the Commerce Department, US GDP shrank “only” 1% year-on-year in the second quarter, 0.5% less than forecast. And this was taken as reason for optimism!

The problem is the Commerce Department also revised down its reading of first quarter GDP to 6.4% from 5.5%. It will revise down the last quarter’s numbers, too. As underground economic number cruncher John Williams of ShadowStats.com points out:

The second-quarter GDP “improvement” was only in terms of relative