The fact that safety-first advice is flooding the nets seems made to order for a contrarian point of view, that the volatility phase is coming to an end and growth will start again — and I am starting to see that. For example, Barry Ritholtz, who called the March 2009 bottom pretty much to the day, is sounding much the same again. Recent market action has been good.
I wish I could believe it. But the problems in Europe that everyone knows about are ongoing, and not close to being solved. What would the effect be, over here, of a 2008-style credit crunch over there? Meanwhile, over here, people wonder about a double-dip recession. To my mind, there won’t be a double-dip, because the recession here is still going on. There is an “official definition” that says no, that recessions are measured by corporate health, without having to look at unemployment. And in the past the two went up and down together, so it didn’t much matter. But now, after 30 years of class warfare, it is no longer so. Now, our economy is run by people who want to cut workers and add customers, without realizing that those are the same people, and that this contradiction creates the headwinds beating against our economy and our markets.
On the other hand, even bear market rallies can be traded. I must not lose sight of that.
UPDATE 2016 August 28
Well, I should have believed it. Soon after this post, we were off the the races again, at least in the markets. In the broader economy, the recovery was slow, but it stayed a recovery, and not another recession.