Real bottom won\'t come until the end of 2010

pinball

The \"Green shoot\" from March this year seems attractive for everyone and most believe that the recession will be over next quarter, if not by the end of 2009.

  Well, if you look at GDP growth as the only standard of recession, it may end this year. But do you think an economy with 0.5% GDP growth and climbing unemployment as recovering? Apparently, Mr. Market won\'t agree so.





The most recent case is 2000-2003 recession, when GDP bottomed out from the end of 2001(nonfarm payroll also supported the proganda, however, seems everyone forgot it was still negative though a recovery from \"the most negative\"), however, unemployment keeps depressed and the peak comes at Q2 2003. So what\'s the Mr. Market\'s choice? It keeps falling 2001-2002, formed a \"W\" bottom then, and climbed out in Q1 2003. So Mr. Market favors the unemployment, much more than GDP.

  It is very natural for market to choose so, if everyone in the nation worries about his/her job and future, and more and more people keep losing their income, you can hardly imagine there is strong buying power in the economy, and the consumption, is the soul of U.S economy.  

  So now, the unemployment keeps endless rising, will it suddenly stalls somewhere and let us take a breath to rest? Unfortunately, chart of initial claims crashes the hope.
[localimg=180,109]5[/localimg]
The red line above is the number of people who first claim as unemployment(lose their jobs recently), so the higher initial claims, the faster the unemployment rate climbs. The unemployment only decrease when initial claim is below 400,000 level, do you think we have any hope to reach there?

  Ok, let\'s make a very rough guess. Assuming the worst GDP and worst nonfarm payroll led the market 5 quarters like 2000-2003, and assuming the worst has really past, the market \"may\" bottomed up in Q2 or Q3 2010. Before that, we still suffer.



  I have a stronger evidence to show that market may bottom out Q4 2010 or Q1 2011, a little bit later than the above estimate. It comes from the demand of credit, the real first principle essential core of the economic cycle, which can predict many wonderful things from the market top/bottom to the oil price, etc. I\'ll present it in next article.

pinball

hmmm, there maybe some problem on the attached pictures.
Please go to http://blog.sina.com.cn/pinball1980 to see the full version

pinball

Don\'t let this article affect your current short-term decision.
Let\'s go to cobra for the guide of  how to act TOMORROW :)

Kami

Ding! Thanks for sharing!

outer

asap

Thanks!

acura

thanks

ricky

Cobra

NND，好久不见，你死哪去了！？

soulvirus

thanks

yam

赞！

balto

新低手

Billyboy

Ding

rightonmoney

maybe/

pinball

9# Cobra

I got seriously sick from the very beginning of 2009, and was forbidden to stay long in front of devices which radiate rays.
After I got recovered, the proxy I used to access hutong9 expired. It is not very easy to find a proxy in mainland China and I got one which only support reading but not posting.
Until yesterday I found slp\'s article in \"北美生活\" to get a new one.

btw: the whole blogspot.com was blocked too. So now I have to read your marketview through proxy...... what a life...

coexist

。。。

ziteng_rhein

maybe too early

happyface

bucks

nice