The global economy has managed to keep on track despite a series of negative events. According to The Hightower Report, Commodity Outlook - 2010.04.26; “The evidence of forward motion is quite compelling with various economic readings flashing positives, corporate earnings showing an improvement in revenues and profits and ongoing evidence that the Chinese economy will continue to expand.”

Further, Businessweek reports; retail sales likely rose in April for a seventh straight month. This rise points to a rebound in consumer spending that is helping to broaden the economic recovery. Economists explain that the largest gain in payroll (over the last four years) may be foreshadowing retailer's confidence in sales growth and the lift in payroll will encourage further consumer spending. “Retail sales are picking up because of income growth,” said Dean Maki, chief U.S. economist at Barclays Capital in New York. “Consumption is going to be growing at a firm pace through the end of the year. We are in a sustainable recovery now.”

In other news, the Colonial Pipeline has recently seen a string of days where a number of requests for shipment of gasoline and distillate products were rejected because of capacity constraints. This news is also contributing to renewed economic optimism. According to Hightower, “Chinese oil demand rose more than 12% in March and according to PetroChina that resulted in a seventh straight month of double digit demand expansion. When one also notes that Chinese copper concentrate imports were 17% above year ago levels and up 27% from the prior month, it is clear that the Chinese economy is not hitting the skids, contrary to many Wall Street predictions last month.”

To summarize; the Bears are suggesting that the significant gains in the stock market (using the 2009 lows as a baseline), are signaling more expansion than can be justified by current economic conditions. However, an alternate point of view might be that concerns over a potential depression were actually factored into the market between September 2008 and March 2009; as such, the market is actually finding a realistic level. One of the few people who saw the US economic crisis coming, International Institute of Management President Med Yones, is now predicting that the economy will begin to recover in 2010.

Let's hope the recovery is here.
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  1. Looking back on this article, it seems like we are in mixed-recovery mode. It seems as if everything is and was in place for a recovery to to happen but people refused to accept it. This should make for a very interesting 2012.

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