Rally Attempt Ends, NBER Makes It Official

Just a quick post to note the end of the rally attempt (its start was noted here: Market Update: Good News/Bad News).

Here is the Yahoo Finance arket summary and here are the volume leaders. As you can see, it was a 90% downside day and not a single stock was up on the volume leaders list (except a short ETF).

Also of note is today’s National Bureau of Economic Research (NBER) “news”: “The economy’s yearlong downturn, officially declared a recession.” I put “news” in quotes because their “economic indicator” (or whatever you prefer to call it) is backward looking, just like all non-market based economic indicators are.  Here is an LA Times article and here is the official NBER release.  Here is a blog I published over a year ago (in November 2007) saying the U.S. was likely already in a recession and why (includes annotated chart).

The only forward looking indicators, of course, are market-based ones, such as the stock markets and bond markets themselves, which discount things around 6-12 months in advance, which means (as always), that the bear market low will occur 6-12 months before the recession ends.

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4 thoughts on “Rally Attempt Ends, NBER Makes It Official

  1. From CBS MarketWatch:
    “10 clues: A new bubble is blowing”

    The National Bureau of Economic Research says we’ve been in a recession since December 2007. Bullish news since the average recession’s only 10 months. But what were America’s top economists hiding for a year? Isn’t data just facts?

    “No” said political historian Kevin Phillips in a Harper’s article months ago: “Numbers Racket: Why the economy is worse than we know.” Were economists politically motivated? Biased toward the GOP? Delaying till after the elections?

    Phillips: “If Washington’s harping on weapons of mass destruction was essential to buoy public support for the invasion of Iraq, the use of deceptive statistics played its own vital role in convincing many Americans that the U.S. economy is stronger, fairer, more productive, more dominant, and richer with opportunity than it really is. That corruption taints the very measures that most shape public perception of the economy.”

    Who “profits from the low-growth U.S. economy hidden under statistical camouflage?” Not Main Street but “Washington politicos and affluent elite, anxious to mislead voters, coddle the financial markets, and tamp down expensive cost-of-living increases for wages and pensions?”

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