End of Recession?


As per my view, recession ends when oil price jumped to $45, we are not seeing price cooling off and second indication is gold price spiked above $900 and third indication is consistent home price/sales upward trend and forth indication is stock market keep on climbing north plus today’s important last hour bull ride. We are exactly at bottom and market positioned itself to stabilize and ready for right side of U within next couple of months. Now major worry is inflation and oil price, one of prediction is oil price would touch to $300 with in a year, that’s roughly $8.00 per gallon. This prediction should not happen but never know.

It was a excellent job of President Obama and his team, President Obama said at yesterday’s 60 mins that “Now--there's a potential silver-- silver lining, which may be that things are so accelerated now, the modern economy is so intertwined and-- and wired, that things happen really fast-- for ill, but things may recover faster than they have in the past.” that is exactly right, now we need more help to par with growth of economy.

But there are some caveats though, the final version is work in progress and people try to make it perfect and perfect as a result imperfect one would emerge. The best part of the plan is, private investors and banks going to decide the price and government will not interfere with the process hence we can expect a transparent price determination of toxic assets. For example, $100 worth of mortgage can be sell to $85 or $86, there is no one price for all bad assets. The remaining matters are too economical for me to comprehend but some banks that are already write down their assets are best place to capitalize the moment as per top economists.

Source:
http://www.huffingtonpost.com/2009/03/22/obama-60-minutes-intervie_n_177854.html
http://online.wsj.com/article/SB123776536222709061.html?mod=mktw
http://online.wsj.com/article/SB123784599683118241.html

Comments

Anonymous said…
Good post. I read somewhere that home buying has suddenly increased. Maybe a good sign.
3:09 AM
Subba Muthurangan said…
Thanks Sukumar. Yes, it is a good sign.
12:12 PM
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