At every break in between falls and after every significant event, CNBC is always there with pom-poms in hand talking about the sunny days coming tomorrow. It's about as bad as the US media after 9/11 when they regurgitated everything the White House told them because to go against the grain might make people mad and then they might cut access. Heaven forbid they ever provide any criticism because that might make people ask questions and then what would happen?
If there was ever a time to remind investors that the labor market is a lagging economic indicator, economists say today is such a day. Once the knee-jerk, doom-and-gloom reaction is over, something resembling optimism will prevail with the conclusion that the worst is over for the economy.Yep, Lehman was the start of all of this and doggonit, if they hadn't let Lehman fall we'd be just fine. In no way will the firings the last few months scare the bejesus out of families and they will naturally spend the same way as they have in the past so Christmas season will be great! Hooray! Everything is fine and as long as you close your eyes, don't listen and talk loudly over everyone else you'll be fine. Just ask CNBC.
“This is history,” says veteran Wall Street economist Ram Bhagavatula. “December payrolls will be weak as well. The leading indicators will come from a slow re-activation of the credit markets and increases in consumer spending. You should begin to see that in the next couple of months.”
Bhagavatula is among a growing number of economists who say the seeds of recovery are already in place, even if they are revising their forecasts for GDP contraction in the fourth quarter to show an even greater decline.
"Every recession has its worst day, and this is probably the worst day," says Chris Rupkey of Bank of Tokyo-Mitsubishi.
Economists point to historical data and recent developments as solid grounds for optimism.
"This number is a unique number because it reflects an unprecedented economic situation, which began with the bankruptcy of Lehman on Sept 15, “ says long-time Fed watcher David Jones, of DMJ advisors. “The economy has never been shut down as quicly as it was following that bankruptcy. The economic response to that cut off in credit is unprecedented.”
