A Nasty September

I haven’t posted in a few days.  Heavy family responsibilities have prevented me from focusing on the market and things financial.  But I’m back and have a few observations:

  • The stock market has behaved better than I had expected.  Given the dire economic news that still abounds stocks have not collapsed. Sure, we are in a bear market.  But when you think of the credit crisis that has developed and the huge write-downs in residential real estate, the stock market has proven relatively resistant.  This is particularly true versus the rest of the world’s industrial economies.
  • According to all the numbers I have seen on GDP growth in 2008 there is no way that the current economic condition can be termed a recession, unless the economic rules and regulations for what comprises a recession are changed.  Yesterday we learned that second quarter GDP growth was actually 3.3%. There have not been two consecutive quarters of negative GDP growth, which traditionally has defined a recession.
  • The Democrat convention has in my view went well and should give Obama a nice bump up in the polls.  I think that if elected Obama will be an economic pragmatist. If he is elected on a wave of optimism it could promote a “good feeling” market rally late in the year.
  • For now I still don’t like the tone or feel of the market.  Volume has been very light reflecting the August hiatus from the Street, and we can very well be in for a nasty September.

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