Bankruptcy

Recession Over? Point / CounterPoint

By mcbride

Here?s some good news, the recession is over. Well, at least according to NBER, the National Bureau of Economic Research. “The recession ended in June 2009, making it the longest downturn since the Great Depression of the 1930s, the National Bureau of Economic Research said on Monday.” Here is a link to the NBER?s announcement: http://www.nber.org/cycles/sept2010.html

And here is a link to one article, quoted above, on this topic: http://www.reuters.com/article/idUSTRE68J2JJ20100920

However, here is a diametrically opposed view which holds that the economy is in a “grand supercycle” down and the recent past was just a mid decline bear rally. “Wave [2 circle] [the bear rally then expected to come] could carry the Dow as high as 10,000 [and] generate substantial feelings of optimism. At its peak…the government will be taking credit for successfully bailing out the economy, the Fed will appear to have saving the banking system, and investors will be convinced that the bear market is behind us.” That was written in April of 2009 and published in the Elliott Wave Theorist.

Then in April of this year, that same publication contained an article entitled: “A Deadly Bearish Picture” which called a general top to all markets, with this caveat: “The 7.25 and 20 - year cycles are both scheduled to top in 2012, suggesting that 2012 will mark the end of the last vestiges of self-destructive hope.” So, as I understand it, according the these economists, there will be a series of “things have turned around” rallies all followed by more and more severe declines. That is, until the last decline/rally cycle ends and the real decline takes over without any rallies heading toward a low of less than 1,000 for the Dow, which should be 2016. But for now, a steep decline will soon happen, according to the folks at Elliott Wave. Here is how they conclude their last Theorist when addressing the prices of gold and silver (which they think will melt as the economy continues to slide): “It?s as if we have been watching Groundhog Day over and over for eleven straight years. It?s the same thing, tine and again: optimism pinned to the ceiling (except for the second half of 2008 and early 2009) while underneath, the rot continues, the depression deepens and deflationary risk mounts. One of these days, a wave of selling is going to break this cycle of bubbles for good.”

Here is a link to the economists at Elliott Wave International where you can obtain a subscription and see all of their theories and data: www.elliottwave.com .

So, there you have it, the recession is over or just starting. Personally, I think we are on the edge of a cliff.

Michael

Full post as published by Texas Lawyer Blog on September 21, 2010 (boomark / email).