Marc Lichtenfeld
I'm a glass half full kind of person. That's quite an accomplishment coming from my family, who not only believes the glass is half empty but that it's teetering on the edge of the counter and is about to get knocked to the floor and shatter into a million pieces. Then we'll have to wear shoes in the kitchen for a month, otherwise we'll get shards of glass impaled in our feet.
Over the past year, while talking about the markets and the economy with my father, he'd often skeptically ask the question – "What's going to make the economy recover?"
My answer was always the same. "I don't know what's going to cause it to recover, but the market is telling us it is going to recover."
The markets are a forward-looking mechanism. They rise and fall a few months ahead of macro-economic trends.
The market topped in October 2007. The Great Recession officially began in December of that year. Similarly, the market hit a bottom in March 2009. The recession formally ended three months later.
There are still plenty of nattering nabobs of negativism out there who refuse to look at the data and admit things are getting better, often because of a political or economic agenda.
They'll point to unemployment at a still-too-high 8.3% (although it's down from over 9%) and ignore things like:
- The four-week moving average of jobless claims is at its lowest level since March 2008.
- Consumer confidence is at its highest point in over a year.
- Tax revenue in many cities and states is higher than expected.
- The Non-Manufacturing Business Activity Index rose for the thirty-first consecutive month and climbed 3.1 percentage points in February.