We have gone from the jobless recovery to the full employment recession.
Recap of prospects for strong GDP in 2008 – details/support covered in previous posts:
- Government spending has been moved forward and is now kicking in.
- Exports accelerating, sustainable, and keeping personal income growing.
- Business inventories are very low.
- Fiscal package to be high multiple.
- Short term interest rates will be kept low enough to keep mortgage resets from being disruptive in Q1.
- Asian stocks overnight rebound and US stocks rebounding as well – PEs looking unsustainable low.
- Housing too low for further declines to subtract from growth – can only add if it rebounds as I expect it will.