By Bill Bonner
08/13/09 Ouzilly, France
Hey…how ’bout this rally!
The Dow was up 120 points yesterday. Now, we’re beating the bounce of 1930. The post-crash bounce in 1930 lasted fifth months. Ours began on March 9th…so it is now in its sixth month.
And like 1930, people are coming to believe that recession is almost over…and happy times are here again.
Heck, we’re sure the trouble is behind us now; 53 economists said so!
According to Bloomberg:
“The economy will expand 2 percent or more in four straight quarters through June, the first such streak in more than four years, according to the median of 53 forecasts in the monthly Bloomberg News survey. Analysts lifted their estimate for the third quarter by 1.2 percentage points compared with July, the biggest such boost in surveys dating from May 2003.
“‘We’ve averted the worst, and there are clear signs the stimulus is working,’ said Kenneth Goldstein, an economist at the Conference Board in New York.
“‘Cash-for-clunkers was the icing on the cake,’ said David Greenlaw, chief fixed-income economist at Morgan Stanley in New York. ‘It’s well-timed stimulus syncing with cyclical forces leading to a ramping up of production.’”
Yes, now the economy is firing on all cylinders…or just about. Yep. No doubt about it. Still, there are some nagging doubts. The latest figures show foreclosures still increasing – up 7% in July from a year before. And house prices are still going down. And unemployment is still going up. And consumer prices are