Monday, September 20, 2010

The recession is officially over

It's not often that an economist makes a near-perfect forecast, so I deserve to take a moment to toot my own horn. In my 2008 year-end forecast, "Predictions for 2009," I wrote that "the economy is going to recover sooner than the market expects, with the bottom in activity coming before mid-2009." Back then the market was expecting a prolonged depression/deflation: 10-yr Treasury yields were approaching 2%, and corporate credit spreads had reached unimaginably high levels.

Today comes the official news, from the National Bureau of Economic Research, that the recession ended in June 2009. You heard it here first, 15 months ago, when I noted in a June 18, 2009 post that "we have very likely seen the end of the recession."

7 comments:

Rick said...

While I recognize your call that things are not getting worse, I'm sure that the 14.9 million unemployed persons in the BLS Household Survey in August 2010 and in August 2009 will not be jumping for joy. Also, I would wager that the 139.45 million employed persons as of August 2009 vs the 139.25 million employed persons as of August 2010 would not be celebrating NBER's confirmation that the recession ended in June 2009. The recession is not over for the unemployed.

Benjamin said...

That's why we all read Scott Grannis--terrific and timely insights.

Donny Baseball said...

Great call. I hope you - and I have a feeling you did - made a little money off this call. When optimism prevails it's a great thing. When optimism prevails and the optimists are richer, it's a really great thing!

John said...

This is not the only call Scott has made correctly.

No one bats 1.000 but Scott's record (and his judgement) is excellent.

Benjamin said...

BTW, one of Los Angeles' landmark office buildings, the Union Bank tower downtown, just sold for $300sf.

Not a bad price, even seems rich to me. Obviously, big professional investors bought it.

Have to say it is positive sign.

septizoniom said...

post hoc ergo propter hoc

John said...

Not only is the recession officially over, it appears the equity market correction that began in late april/early may is over as well. The S&P 500 today closed well above the highs of mid june and early august. I am still expecting a pullback, but it should be shallow and relatively short. The april highs should be exceeded by yearend.

Thank you Scott, for your consistently good judgement during the days when everyone was expecting another catastrophe.