Never has a bull market climbed a steeper wall of worry, observes Tim Bond, head of asset allocation at Barclay.
He believes a strong recovery is going to happen this year.
"Just as global output is performing a V-shaped recovery, there is a big risk U.S. employment will do the same, with monthly payrolls showing surprising growth by the end of 2009,” Bond tells the Financial Times.
Bond believes high unemployment doesn’t pose a genuine problem.
“In 1982, U.S. unemployment hit 10.8 per cent, yet GDP soared at an average annual pace of 7.7 per cent over the next six quarters,” he says.
Businesses, like markets, panicked after Lehman went under, Bond points out, responding by reducing both employment and output far more than turned out to be necessary.
De-leveraging is no obstacle either, Bond notes, because increases in private leverage never play a significant role in recoveries.
Numerous signs are now pointing to economic recovery, according to economist and CNBC host Larry Kudlow, and Republicans need to grab their share of the credit.
“A tremendous summer rally is going on in stocks, and it's being driven by better corporate profits and improved leading indicators - including a possible upturn in housing starts and sales, and a major downward spike in weekly initial jobless claims,” Kudlow writes in The National Review.
“So you have to believe the stock market is calling the tune for recovery.”
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