Market's rally ends 'dark pessimism'
Champagne corks started popping early this morning on Wall Street as the Dow crept past 9,000 points. But will it stay there? Jeremy Hobson reports.
Traders work on the floor of the New York Stock Exchange. (Spencer Platt/Getty Images)
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Kai Ryssdal: We normally wait until a little later in the program to tell you this, but this was a mighty fine day on Wall Street. There were better-than-expected profits at some key companies. Better-than-expected home sales figures, too. Marketplace's Jeremy Hobson has more from our better-than-expected desk in New York.
JEREMY HOBSON: It may be raining on Wall Street tonight, but Mark Zandi, chief economist at Moody's Economy.com, says...
MARK ZANDI: The sun is definitely rising. I mean I don't think it's going to go to high noon any time soon, but this dark pessimism that has pervaded this economy for so long is now lifting.
Could you be a bit more specific, Mark?
ZANDI: The Great Recession, the worst downturn since the 1930s Depression, is coming to an end.
OK, that's one man's opinion. What about Peter Morici, the University of Maryland economist who tracks economic indicators like tweeters track their friends on Twitter?
PETER MORICI: It's the beginning of the recovery, analysts are uncovering prospects for profits across the board.
And perhaps companies are realizing they laid off too many people. That's the view of Liz Ann Sonders, chief investment strategist at Charles Schwab.
She says the rising stock market is feeding on itself, sending investors into the second stage of fear.
ANN SONDERS: We know the first stage of fear, which is get me out, things are horrible. The second stage is as the market kind of takes off on the upside, people are then fearful of missing out.
But she does point out that when you hear housing starts, or any other economic indicator are better than a year ago, it soon won't mean much. Because, a year ago, we were just a month away from the collapse of Lehman Brothers and everything that followed.
SONDERS: We're entering into the part of the cycle now where year-over-year comparisons are going to get easier and easier.
It's nice to be able to look back on the dark times, isn't it?
In New York, I'm Jeremy Hobson for Marketplace.
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From Santa Cruz, CA, 07/24/2009
I am heartened to hear that some believe the recession is turning around but you can cue the sad music for California. Californians are just on the brink of really hitting hard times. With our state unwilling to insure new children in it's CHIP program and slashing education funding it will be a long sad road in the once golden state. Just take a look at how it is treating the UC system " The governor’s proposed new cuts, if implemented, would mean that UC's state-funded budget for 2009-10 will have fallen $637 million, or 20 percent, from the original 2008-09 budget of $3.25 billion. The cuts to UC during these two years total $813 million. http://www.ucsc.edu/budget_update/article.asp?pid=2994 "
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