The Recession Is Already Behind Most Business Sectors

The current bull market began on March 9; it has a long way to run. Even after average gains of about 40%, stocks are still very cheap. The wet blanket of fear that covered the market and the economy is drying quickly.

Throughout the recession, the Internet sector has surged. The Internet has been climbing the second phase sigmoid curve at an accelerating rate. Facebook has added 50 million users in only a few months! Amazon (AMZN) just purchased a $900 million Internet shoe company. Apple (AAPL) sold 7 times as many iPhones this past quarter as it did the year before!

Several previously dead economic sectors are rapidly returning to health and the market is beginning to have hope that the most burdensome of the Obama programs will never be enacted. Housing sales are up 3 months in a row; bidding wars have broken out for low priced houses. The mad rush of young couples leaving apartments are buying houses to pick up the $8,000 government housing giveaway. Before this program expires in November, it will cause a spike in low home price buying that will in turn cause a subsequent wave in medium home price buying, etc. As they say, a healthy housing market is like a ladder, you can't get to step two unless the first step is available.

Looking ahead, one can see a huge investment wave developing. What is so neat about this wave is that the incentives to invest begin with the word FREE. For example, the Pandora music service, basic account is FREE. After years of legal dispute, Pandora and other music streaming services have the legal right to offer large amounts of music free of charge. As you may recall, Napster was at the forefront of the first surge in Internet use. Android and Pandora just made a deal. This means that "free" music streaming will be available on cell phones and other portable devices. Of course, the big difference this go round is that the "free" service will be provided by providers that "meter" usage.

There has not been a recession in Internet traffic, but there is an explosion of usage on the way. While individuals switch to "smart phones", providers will switch to 4G speed. Today, users of "smart phones" are kind of like the man who bought a Corvette to drive to work even though the speed limit on his road to work is 20 miles per hour; he enjoys the nice ride and the neat amenities in the car but he can't wait to get on the Interstate. Over the next couple of years, "Interstate Speed" is coming to the mobile Internet.

Huge investments will be made on the consumer side and the business side. The consumer who signs up to pay $60 per month for 24 months for a data plan signs up to "invest" $1,440 into the mobile Internet business. Companies will have to spend far more than $1,440 to install all the structure needed to handle this traffic. A huge investment boom is just getting underway. In most businesses, the recession is already over. It will take many businesses time to recover back to prior business levels but climbing back out of a hole is not nearly as terrifying as falling in and not feeling the bottom.

Comments

[commoinsens...:]

Where does the author buy his crack?

Jul 27 09:46 AM

[User 143167:]

If you are true, you will see the world of $200 oil by 2010. Welcome back!

Jul 27 09:50 AM

[Dave Wrixon:]

Most of this is tosh but innovation from Asia will increase Mobile Internet Speed. Don't expect this to greatly benefit either Motorola or Apple.

Jul 27 11:03 AM

[buyforeclos...:]

Maybe the market does have a long way to run due to scum at GS and other pumpers...so I will ride it up. But your a FOOL if you think the recession is BEHIND most business....

this market will crash again at dow 10.000 + -

Jul 27 11:32 AM

[j-dub:]

Not only is the crisis over, BUT IT NEVER EVEN HAPPENED!!!

It almost did, BUT IT DIDN'T

Jul 27 09:10 PM

[jgc303:]

Wow.

Bubbles never pop, trees grow to the sky, and faster 4G phone service is going to lead us out of the wilderness...I hear there's a guy in Texas who's selling geese that lay golden eggs too, but then again, that's a commodity play, so never mind...

Jul 28 09:39 AM

[buoy:]

Yeah, right...4G. They are having enough problems providing 3G.

Jul 28 05:37 PM

[Mr. Ed, Jr.:]

"The mad rush of young couples leaving apartments are buying houses to pick up the $8,000 government housing giveaway. Before this program expires in November, it will cause a spike in low home price buying that will in turn cause a subsequent wave in medium home price buying, etc. "

Much like "Cash For Clunkers" revitalized the auto industry. Now, showrooms are empty. 31% of those who traded in their car (that had no payments) say they are having some buyer's remorse for taking on a new monthly car payment.

According to the NAR, 350,000 homebuyers (of 2 million who bought within the last year) who used the tax credit said they would not have done so without the credit. What would their absence do to the summer sales numbers ? And summer is "home-buying season".

The FHA has allowed tax credit users to apply the credit as the down payment-- and the FHA was only requiring 3.5% down anyway. Nothing down on that new home--Haven't we seen this before ? How did it work out the last time ?

Unfortunately, the author has the situation completely backwards. (Just like the government)

When the 8k tax credit expires, we will be entering housing's slow season. In 3 of the last 7 months, NOD's have set new records. This means we will have record high numbers of foreclosed properties hitting the market early next year, as unemployment continues to rise.

No tax credit, high unemployment and record high numbers of foreclosures....Good luck getting the "wave" going under those conditions.

Sep 23 12:27 AM