Has the POR (Pelosi-Obama-Reid) Economy Bottomed Out?
The performance of the stock market since March 9 provides reason to hope that the POR economy's wealth-destroying damage has, at least for the time being, reached its lowest point.
The markets' broad-based 15% bounce-back since then (as of when this column was written), which has brought cheer to battered investors for the first time in many months, has had four primary causes.
First, there has been decent economic news. January's retail sales increase was revised upward from 1.0% to 1.8%, representing the largest jump in three years. February's 0.1% drop beat expectations of -0.5%. Housing starts jumped nicely in January, defying the decline-expecting consensus.
Second, several key companies have reported earnings and other news beating analysts' predictions.
Third, after months of nearly daily warnings of dire catastrophe, President Barack Obama has altered his public statements on the economy to reflect the type of qualified optimism one ordinarily would expect from the country's chief executive.
A final, less appreciated reason is that there were signs of a pushback by the bailed-out. Citigroup's chairman said that the bank doesn't require any additional government investment. Bank of America's chairman echoed that sentiment. Even GM, while still on the brink, said it doesn't need its next cash infusion right away. This seems to indicate that managements are chafing under existing, imminent, and/or proposed bailout-driven restrictions on how they run their businesses, and are trying either to get out from under them or to minimize their damage. I believe the markets were pleased at the possibility that the creeping nationalization we've seen in the past six months may be halted before it goes all in.
This is all well and good. But before the markets' trough is forgotten, it's important to document the damage that POR economy architects Nancy Pelosi, Barack Obama, and Harry Reid have inflicted on the nation, and to demonstrate just how far the markets have to come back before we can be said to have recovered completely.