In January I wrote a post about Captain Sullenberger safely landing his plane in the Hudson River. At the end of the post I said it was a sign that the economy had reached bottom and would soon improve, thanks largely to what I predicted would be an upsurge in consumer confidence. I think people needed exactly that sort of story to regain their faith in humanity.


As you can see from this historical chart of the S&P 500, my prediction might turn out to be about right, give or take a few months. And now the latest news is that consumer confidence rose by an "unexpectedly" high number.


My real estate broker tells me that the market for homes in our part of California is white hot. Every property is getting multiple offers, and real estate hasn't been this affordable in a few decades. Prices aren't rising, but they abruptly stopped falling.

Inventories have shrunk, which is generally a good sign for the future, and the public has an unusual level of confidence in an American president for a change.

Gas prices no longer seem so high, and the war in Iraq appears to be "won" in some fashion, depending on how you define that sort of thing.

We still have high unemployment, which will dog us for some time, and a crushing debt that seems impossible to fix but probably isn't.  But for now the media is tired of reporting bad news, partly because doing so is bad news for their own bottom lines, so expect to see some new media-driven economic bubbles forming by the end of the year.

Disclaimer: Don't get your financial, legal, or medical advice from cartoonists.

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+1 Rank Up Rank Down
Jun 9, 2009

White hot means prices go up. There may be multiple offers but only a limited number are qualified to get a loan. So what if Moe, Shemp and Curly show interest. None are qualified.

You are just a bozo.
+1 Rank Up Rank Down
May 28, 2009
Gas prices in MY part of California just went to $2.79.9999...but summer is here and everything feels more hopeful. Unless you work for anything having to do with cars.
May 28, 2009
um, except oil is rising, and will continue to do so, and the derivitaves maret and the fed are having a fun time jacking interest rates. I expect another issue
May 28, 2009
The next economic bubble is going to be 'green' energy. Proof of this is that I spoke to somebody who was providing consultancy for one of these new green energy companies. Everybody in there was flapping around, acting really busy, talking in lots of buzzwords, but not actually achieving anything. And they don't seem to have any particular working product. This is exactly what the dot com industry was like in 2000. No doubt some conman in a suit is going to try to convince you soon that investing in green energy is a no-brainer - while taking a sizeable commission in the process. My advice is: don't do it - or at least sell your shares soon after for a profit before everybody else realizes that the emperor has no clothes (again).
May 28, 2009
"my prediction might turn out to be about right, GIVE OR TAKE A FEW MONTHS"

Your prediction was that the bad times would stop - basically, a binary "they will/they won't" situation. To claim sucess with such a long lead time makes you no more "successful" than my prediction three months ago that "things would get better because my dog pooped something out in the shape of a dollar".

Good try at bigging yourself up, but only the gullible would believe you have some kind of insight.


You're not thinking of starting a cult, are you?
-1 Rank Up Rank Down
May 28, 2009
You are tell much more about this topic and the way of your approach is different. so i lke ur article. Can you will written any new article in new dimension and i am eagerly wait for this...


<a href="http://mls.fastrealestate.net">mls</a>
May 27, 2009
Tell you what - I won't draww cartoons if you don't practice economics. www.storehousepartners.blogspot.com
+1 Rank Up Rank Down
May 27, 2009
"Even a stopped watch tells the right time twice a day."
--Withnail & I
+9 Rank Up Rank Down
May 27, 2009
"My real estate broker tells me that the market for homes in our part of California is white hot."

My local drug dealer tells me that the FDA is about to approve crack as a sweetener.
+1 Rank Up Rank Down
May 27, 2009
Hey monkey brains, that new house must have some chemical that is affecting your cognitive reasoning! Just because Consumer Confidence took a dramatic leap up, doesn't mean the end is in sight. The index is still at HISTORIC lows, unemployment is still increasing, foreclosures are just getting ramped up, and our good friends the Chinese are growing leery of our debt instruments...perhaps this the calm before the real smelly storm hits!! Not to mention our political environment, inflationary pressures, and two wars?
May 27, 2009
"Gas prices no longer seem so high"

Harumph. Yesterday morning, the gas station I drive past was at $2.45 for unleaded (which was already $0.20 higher than a week or so ago). Last night, it was $2.65. This morning? $2.55.

I'm gonna hold off on agreeing that gas prices don't seem so high until I see what it is tonight ... and next week.

-2 Rank Up Rank Down
May 27, 2009
I think the crisis wont be as bad, as the world is now more aware on how to create wealth
+5 Rank Up Rank Down
May 27, 2009
My folks just filed for bankruptcy. They just watched what they describe as thirty years of hard work disappear in a flash. In fact, if I might be a snarky daughter hiding behind a blogias, it was 10 years of hard work, followed by 20 years of living off the proceeds and ignoring all warnings that it was not a fully self-sustaining enterprise. The downturn did them in, but better planning and closer management over the years would have left them in a much better position to survive the crisis.

Given that recent experience, I'm feeling a tad more negative about things - for no better reason than the knowledge that instead of any hope of help putting my kids through college, I need to be thinking about helping five people in retirement, not just three (we are already helping my MIL). This will affect my kids choices in school. (They will be fine, but some of the more glittering prospects are fading out.)

I do think the economy is on the upswing, that the feds intervention basically worked and that things will get better. However, I have a dark suspicion that we, as a country, are a bit like my folks. We have pockets of hard work and enterprise, but there is also an awful lot of coasting going on - and that will catch us up eventually.
May 27, 2009
So far, you are right and my Ouija board - which predicted that this is just a sucker's rally - is wrong.

So far. The Ouijja board had predicted a long bubble; we are between the half to 2/3s point. The market has recovered from it's lows, but seems to have plateaued, as predicted. The next 6 weeks will tell the real story.

I agree with you that there is a sense of hope out there - I just think that there's one last shoe to drop before we are actually at the bottom.

One thing that hasn't changed is that the short-sellers still have the tools to do what they did last winter, that is, the "uptick rule" is not yet in place. If money goes back into the market (due to increased confidence), and they decide (collectively, but not conspiratorially) that they can again panic people into driving the market down by short-selling, they'll do it again, and we'll be back where were.

May 27, 2009
"my prediction might turn out to be about right, give or take a few months. "

"A few months" is a pretty big error rate for calling for the end of a recession (which typically only lasts around a year).

Besides we all know it was the $800 billion stimulus package that turned things around.
May 27, 2009
You could add "management" to the list, but then Scott would sell fewer books.
+3 Rank Up Rank Down
May 27, 2009
The Conference Board's Consumer Confidence Index means nothing. I call it government propaganda. They are just trying to stimulate the economy. But there's many significant factors that are working against it and that's not changing anytime soon.
May 27, 2009
I still think there is a ripple effect yet to be seen by all the unemployment. I also think the housing situation is not even close to being over. There is still so many in foreclosure and the inventory has yet to be published. I hope you're right but I still think there is more on the way.
May 27, 2009
It's too based on everything going right, though. Which isn't to say our house of cards will get blown over, just that overcoming the challenges will require excellence from everyone. And how often does everyone commit to excellence?
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