SO THE MARKETS ARE way up. Well, compared to their low, anyway, not compared to where they were when Obama was sworn in. But is it a sucker’s rally? Hey, if I knew that, I’d be trading, not blogging. I don’t really see how the economic future looks brighter, though, given the out-of-control spending and growing unemployment numbers. On the other hand, if you’re worried about inflation, maybe it makes sense to pile into equities?
UPDATE: Retired steel mill engineer William Casey emails:
All the self-styled economic experts and business commentators, and even Ben Bernanke can look at all the charts and and computer models they want, but there is one clue to where the recession is. More steel companies are idling coke making facilities. Coke is an essential ingredient for making steel and these multi-million dollar facilities are not shut down for short term forecasts. The process is too costly and potentially damaging to the facilities, so that these decisions are not made on a whim or a guess, but on a firm view of future sales.
Not a good sign for recovery. Here’s a related item: U.S. Steel’s Fairfield Works in Alabama to suspend production, affecting most of 1,700 workers. “U.S. Steel said Wednesday that it plans to temporarily idle primary steelmaking operations at the Fairfield Works, affecting most of the 1,700 workers there, as steel demand slumps. . . . U.S. Steel has now shut or announced plans to shut five of its seven North American steelmaking operations. The company lost $440 million in the first quarter, and the World Steel Association projects that U.S. demand for steel will fall 36 percent in 2009.”
ANOTHER UPDATE: More on the “sucker’s rally” side, here.