Sunday, April 19, 2009

Recession? What Recession?

Off-topic, but way back in 2007 Dallas (or LA or Miami) would have been flooded with the new Porsche Panamera.

A four door, Porsche with 500hp.....excuse me but I think I just drooled on my laptop. Porsche is sticking with their target of selling 20,000 units in 2009-2010 despite the $120k price tag.
Not surprisingly Porsche decided to launch the Panamera not in NYC, London, Berlin or Paris, but in Shanghai at the Shanghai Auto Show. Hmmm, I'm feeling pretty good about my kids chance of getting a D-1 scholarship in rhythmic gymnastics or bass fishing so maybe I could pull out a little college money and treat Daddy to a new ride :)
One final note on autos. I heard a Cadillac/Hummer/Buick/Saturn dealer on a national car call-in show this weekend. He said that the good news was that in March he was still the second largest Hummer dealer in the US (he's based in Miami). The bad news was that it only took 17 Hummers sold in March to be the 2nd largest dealer. He said Saturn and Hummer businesses were both down 75%+.
There were some pretty good reviews of the economy over the weekend. One of the best comes out of Barons and their conversation with David Rosenberg.
"We should add that he also stresses that it’s critical for both the economy and the market that payrolls stop shrinking. All the talk about jobless claims “stabilizing” is so much poppycock, he snorts. That number of claims, he notes, is still consistent with monthly payroll losses of around 700,000. As with industrial production, which is also in a vicious slump, employment must stop falling before a recession typically ends.

Call us when claims fall below 400,000,” he says, which is his estimate of “the cut-off for payroll expansion/contraction.” Until then, he warns, “the recession will remain a reality. Rallies will be brief, no matter how violent, and green shoots are a forecast with a very wide error term attached to it.”
Via Barry R. at The Big Picture - The Russell 2000 small-cap index is up 36% since the March low, outperforming the S&P by almost 10%. The last time the Russell outperformed the SPX was from late November to early January. Two months later, the major averages made new lows.

One other warning sign: Over the past five weeks, Rasmussen’s investor-confidence index surged 32 points — unprecedented gains in so short a span. This suggests excessive trader optimism for a sustained equity-market rally.

I couldn't agree more about trader optimism. Listening to the traders on Stocktwits you'd think it's 1999 and the tech bubble is raging.


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