Calling Off Depression 2.0?

by: Paul Kedrosky

Pace my earlier post about an uptick in short-term economic data, here is a piece from Reuters late today. I am still of the view that we have the current rally, potentially to considerably higher levels on relief and better short-term U.S. data, and then sawtooth around into spring/summer. After that we get disappointed all over again with a tepid non-recovery and more failures/defaults, and the market wanders down again.

Other views? I’d cheerfully be wrong, of course.

Call off Depression 2.0.

While still far from health, the U.S. economy is showing some encouraging signs of life as consumers tiptoe back to the shopping mall, home builders pick up their hammers, and manufacturers clear out inventory.

That suggests the soon-to-be-completed first quarter will be as bad as it gets, and apocalyptic fears of another lengthy, painful Great Depression look unwarranted.

But it does not mean the recession is over.

A return to growth is still several months away, and it will probably be far longer before the economy is strong enough to create jobs.

More here.

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