gabe borenstein

Labor Pains: Deeper Contractions

We are not in recession which is defined as two consecutive quarterly GDP declines.It is the fact ,that many investors /economists and the portfolio managers use the term recession quite frequently.The stock market prices have adjusted accordingly .The latest GDP data defies the definition of the recession.While many may argue that the GDP was primarily driven by the exports ,that is irrelevant issue as exports create economic growth and jobs.Yes the U.S has finally became mean, lean economic exporting machine.
The unemployment data appears to be distorted and more importantly it is a lagging indicator.It reflects the past not the future.
We continue to deal with an investment psychosis which ignores major improvement is some key data and continues to amplify and distort less impressive indicators.
The U.S economy is consolidating and on the way to a major rebound.
Investment psychosis and the market volatility will continue while longer.To quote one President ,"make no mistake about it"-we are heading for unpredented rebound which will be amplified by record inflows into dollar and a dollar denominated assets.