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This Rally May Be the Real Deal

Positive indicators, better policy, historical benchmarks; the time is right for a bottom

By Clay Dillow, Newser Staff

Posted Mar 26, 2009 9:07 AM CDT

(Newser) – The tentative rally on Wall Street is reason enough for one economist to feel hopeful: "I’m ready to take another shot at calling the bottom," writes Michael Mandel in BusinessWeek. Since (apparently) bottoming out March 9, stocks have risen 20%, and the reasons behind the climb are genuine. Better policy, signs of economic revival, and historical data all point toward a possible sustained boost.

The $2 trillion the Fed and the Treasury are pumping into the markets are "a lot even in an economy as big as America's," Mandel observes. Durable goods orders are up, and the trade deficit is narrowing. "That, in turn, means America's financial markets become less vulnerable to turmoil in other parts of the world," but the potential fly in the ointment is a biggie, Mandel warns: "stubbornly high unemployment."

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SInce October, markets have lost nearly half their value, but Michael Mandel thinks the bottom may finally be here. (AP Photo/Mary Altaffer)

A display shows stock prices at a brokerage firm in Hong Kong Thursday, Oct. 30, 2008. Since then global stock prices have slipped by almost half. (AP Photo/Vincent Yu)

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Despite the collapse that lies behind us and the undeniable problems ahead, this might be the moment when the market begins its next sustained climb.
- Michael Mandel

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This Rally May Be the Real Deal