Larry Kudlow is a very knowledgeable voice on economic trends and developments. I sure hope his post at The Corner is correct:
Investors continue to ignore one of the very brightest spots in the firmament: Namely, the credit freeze is thawing, according to all manner of key interest rates and spreads. In fact, LIBOR is around 1 percent now, back to where it was in the early summer of 2007 before the crunch started. This means that much of the uncertainty about lending, borrowing, investing, and hiring is receding from the market. This is a very positive sign. While retail sales and jobs are lagging indicators, the credit-market improvement is a leading indicator â€” pointing to recovery in the economy sometime this spring or summer.
Iâ€™m gonna bet that after the bank earnings come out in the next week or so that weâ€™ll see a better stock market. But investors will certainly be happier with a strong Treasury secretary confirmed, in place, and on the job.
Hopefully we’ve seen the bottom of this deep recession, and some of the uncertainty and pessimism will leave the markets. But if President-elect Obama is successful at following President Bush’s bailouts with his proposed, so-called “stimulus” plan, we can only expect any recovery to take even longer.
But don’t worry: No matter what, the old media establishment will give Obama the credit for rescuing the economy.