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The Masked Tulip

Still In The Bounce Phase

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http://www.dailyreckoning.co.uk/economic-f...very-45184.html

“It looks like things are finally turning around,†said a friend at Saturday night’s dinner.

“Not at all... †we replied.

Paul Krugman says the world “avoided a second Great Depression.†He’s wrong too.

The stock market crashed in ’29. The market then bounced. After a few months almost everyone was persuaded that the “worst is over.†But the worst was just beginning. It wasn’t until 1932 that the stock market finally hit bottom. By then, it beginning to seem like a depression... and only years later did economic historians tag it as a ‘great’ depression.

This depression is still wet behind the ears... We’re still in the bounce phase. On Friday, the Dow went 113 points higher. And as the bounce continues, more and more investors will come to believe that stocks are in a new bull market and that the economy is back in growth mode.

Neither will be true.

The stock market is in a bear market rally, not a genuine bull market. The economy is entering a long depression... possibly a ‘great’ one...

Article goes on to give reasons why they believe the above - well worth a read.

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