Reaching A Bottom?

In order for our economy to begin recovering, it first has to reach a stable bottom before any upswing.  Larry Kudlow highlights (via Memeorandum) some favorable economic stats released this week indicating that we might be at least near a bottom of some sort.  The numbers are mixed but well worth noting.  Personally, I don’t think a bottom is as clear and acute as Kudlow seems to believe, but he would know more than I would anyway.  Of course, there’s still a lot of pessimism out there, and our liberal friends would like to keep it that way.  As always, their entire sense of self and identity as a movement depends on the public’s feeling of crisis and emergency. 

Hence, President-elect Obama and Congressional Democrats begin this new Keynesian-on-steroids era with calls for drastic change, lest the economic situation gets worse.  Action must be taken as soon as possible…our nation depends on it.  Typical fare from the Left.  And what is this new direction? This hope and change for a bigger and better economic future?  About $750 billion in more government spending.  Yeah, that’ll get the job done. 

And remeber the last time our government said something needed to be done about a particular “crisis” and quickly?    That didn’t work out so well, did it?

***

Another sign that we may be approaching a bottom in the economic cycle? A proliferation in rich-people-gone-broke suicides.  On the heels of the Bernie Maddoff scandal last month, one of his hedge-fund clients committed suicide two days before Christmas after having lost his clients’ money and his own personal fortune to boot.  Earlier today, Adolph Merckle a German billionaire and one of the wealthiest people in the world, threw himself in front of an oncoming train after the financial crisis negatively impacted his family’s business empire.

Morbid? Yes.  But markets are based in great part on psychology and you have to watch for the excesses, the extremes.  It doesn’t get more extreme than death.

(UPDATE)

Going beyond simple scare tactics, House speaker Nancy Pelosi wants you to just stop talking about the cost of the new stimulus.

(UPDATE)

Megan McArdle, citing John Kenneth Galbraith’s The Great Crash of 1929, makes an interesting point regarding the suicide of Adolf Merckle:

I wonder if what Galbraith saw in the unusually low suicide statistics for 1929 was the confounding effect of crisis. Suicide tends to fall during crises–they take peoples’ minds off themselves. So perhaps everyone outside of Wall Street was too busy watching the stock market collapse to think about the mess of their own lives–but suicide rates leapt for those on center stage. Certainly, there have been quite a few highly publicized suicides so far that can be directly attributed to the declining markets, and sadly, I doubt we’ve seen the last.

Let’s hope we’ve indeed, seen the last.