If you ask me, the hangover certainly lasted into 2002 and perhaps a bit into 2003 (though the ending date doesn't matter much), meaning the bureau's analysis may not be all that great in the first place. (Of course, if that recession ended in 2001, it's fair to wonder why it took until the spring of 2004 for "Easy Al" Greenspan and the Federal Reserve to raise interest rates. But that's a different issue.)
The plunge that the world economy saw in the wake of the 2007-09 financial crisis was an extreme reaction to weakness that had already set in, and much of the improvement since then has been recapturing that lost ground.
The real contributors to world gross domestic product, and very important ones, are those parts of the world that didn't act like fools and ruin their financial systems via rampant real-estate speculation -- namely, Asia and the BRIC nations (Brazil, Russia, India and China). They are seeing strong growth, and our economy has benefited from that growth as well.
Wall Street Wobegon: Where all the charts are above averageOne place where those benefits seem to be showing up is in the charts for the major stock indexes.
Over the course of the summer, as so many were worried about a stock market crash, I felt such an outcome was unlikely. I now expect that with September tracking to the upside (and the market up for the year), positive momentum alone may force the hands of many people -- namely, the professional investing crowd -- who essentially try to hug the various indexes.
If the bulls succeed in taking stocks higher during the next six weeks or so (despite whatever scary setbacks occur along the way), the market could set itself up for some decent-sized damage to the downside, especially if folks get overly excited about the prospect of throwing out incumbents in November, combined with the potential for more quantitative easing.
Now that the market has spread its wings, I think it's important to keep in mind that beneath the surface still lie lots of problems and potential land mines. To a certain extent, that means if the stock market keeps on chugging upward, there may be some opportunities for selective short positions, betting certain stocks will go down.
Keeping your head in the game
Managing your own psychology is an important part of successful investing, and, for me, these sorts of reminders help keep the tape from persuading me to be overly complacent about stocks when the market is up, just as I tried not to become overly pessimistic last summer when things looked down.
It's a mad worldI did an interview last week with the colorful John Thomas, aka the Mad Hedge Fund Trader.
Interested readers can listen to it here.