Obama, Ben and Tim (O-BenTi, I just created this name to save writing space) might finally be winning the recession war (only time will tell whether or not it is sustainable or going to result in another bubble). Their “glimmer of hope” campaign seems to be working nicely; even the consumer sentiment index says so, offering a hint that the deepest part of the recession may be passing. According to Bloomerg :
Reuters/University of Michigan’s consumer sentiment index rose solidly to 61.9 vs. 57.3 two weeks ago. Interestingly, one-year inflation expectations shot up 1 full percentage point to 3.0 percent. Gas prices are on the rise, as they typically are as the driving season begins, but the gain also hints that consumers expect economic conditions to normalize. There may also be a hint that some consumers could be anticipating monetary inflation, certainly a factor that has fed investment demand for gold and oil”.
Did you notice the positive flow of news these days, almost every where in the media, be it newspaper, magazines, TVs, Internet, everywhere “glimmer of hope” is the buzzword. And I think turning sentiments positive was one of the biggest challenges for the O-BenTi trio, once sentiments improve a significant part of the puzzle is solved.
I hope this is really the beginning of economic turnaround. However, I have my doubts if this is it would have turned so quickly? do you think the worst is over? It was hardly a month ago when sky was falling, dollar’s reserve currency status was (and probably still is) being challenged. Major banks are done with their earnings. I don’t know how much is “reality” behind these “reported” numbers and hence a reflection of true economy. We’ll know in a few weeks time when real representatives of American economy starts to pour earnings and share the outlook.
Markets haven’t taken a breather in spite of all bad stream of news and have been rising on every “light at the end of the tunnel”. I wonder if we are about to see a surprise reversal or we’ll never see these lows again.
What are your thoughts?
Profitable Trading, OP