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Notes to myself, possibly of interest to others.
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Monday, April 12, 2010

Floyd Norris: Why So Glum?

Floyd Norris is a widely respected financial journalist who writes for the NYT and Barrons and various others.  He has a recent piece in the NYT of the subject title.  He tries to make a case that things are going to be great.  He provides no real data or charts, just some anecdotes,  eg:

"The employment report for March, released a week ago, was a milestone that has been little noted. The household survey, from which the unemployment rate is calculated, showed a gain during the first quarter of this year of 1.1 million jobs, the best performance since the spring of 2005...Employment is a lagging indicator...I looked back at the recoveries after seven recessions from 1950 through 1982 and found that, on average, such a strong three-month performance of the household survey, defined as a gain of at least 0.8 percent in the total number of existing jobs, came seven months after the recession had ended, with a range of two to 13 months...If the 2007-9 recession ended in August, as the index of coincident indicators would seem to indicate, the lag this time will have been seven months."

And, "In 1982, Democrats scoffed at a surging stock market and thought a severe recession would last for a very long time. They were confident that the economy would doom Ronald Reagan’s re-election campaign in 1984. All they had to do was make clear they offered a stark alternative to the failing policies of the incumbent.Change a few words (Reagan to Obama, Democrats to Republicans, 1984 to 2012) and you have an accurate description of the current political climate. Could the Republicans be as wrong now as the Democrats were then?"

Reasons to bet the farm?

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