Warren Buffett doesn't adhere to the NBER's definition of a recession, but calls one nonetheless. Old news from Janaury 2008 measured sluggish growth in consumer spending, and that old report's growth forecasts for the rest of 2008 haven't panned out.
I honestly think this recession began just before Thanksgiving of 2007. Can I prove it? Check out this table from the BEA, and note the revised GDP growth figure for Q407 is now negative 0.2. The numbers for Q1-Q208 are in my opinion deceptive; I expect them to drop in future revisions. What's really worrisome is the impact of the massive and continuing drop in residential spending in row 11, a reflection of curtailed housing construction. That's been reported ad nauseum, so I won't belabor the point here.
What's important is that most equity indices, as a supposedly forward-looking indicator, IMHO haven't fully factored in this weakness. Maybe too many hedge fund algorithims are expecting some kind of V-shaped recovery based on who knows what kind of macro inputs (butterfiles fluttering in South America perhaps?). As a Buffetologist, I think I'll hang on to my cash a few months longer when Mr. Market is finally ready to sell at a bargain price.
Nota bene: Anthony J. Alfidi continues to write uncovered calls against SPY and IWM in the belief that they are seriously overvalued.
I honestly think this recession began just before Thanksgiving of 2007. Can I prove it? Check out this table from the BEA, and note the revised GDP growth figure for Q407 is now negative 0.2. The numbers for Q1-Q208 are in my opinion deceptive; I expect them to drop in future revisions. What's really worrisome is the impact of the massive and continuing drop in residential spending in row 11, a reflection of curtailed housing construction. That's been reported ad nauseum, so I won't belabor the point here.
What's important is that most equity indices, as a supposedly forward-looking indicator, IMHO haven't fully factored in this weakness. Maybe too many hedge fund algorithims are expecting some kind of V-shaped recovery based on who knows what kind of macro inputs (butterfiles fluttering in South America perhaps?). As a Buffetologist, I think I'll hang on to my cash a few months longer when Mr. Market is finally ready to sell at a bargain price.
Nota bene: Anthony J. Alfidi continues to write uncovered calls against SPY and IWM in the belief that they are seriously overvalued.
