Get Ready: Soon You're About To Hear "V-Shaped Recovery" All Over Again

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Earlier this year (late winter and spring) you still heard talk of a “v-shaped recovery.”

Then that totally went away, as economic momentum totally petered out, and the Fed brought quantitative easing back to the table.

But big market rallies have a way of colouring people’s economic outlooks, making them more optimistic, even if the underlying fundamentals haven’t changed all that much.

So with stocks near their highs of the year, you can expect to here the “v-shaped” phrase more and more again. We’re seeing it already.

Bloomberg today mentions Barclays Capital chief economist Dean Maki, who declares: “Consumers are taking the baton as a driver of the expansion.”

If that’s the case — if the consumer can somehow overcome credit card debt, a horrible labour market, and the housing slump — that’s huge, and would represent a major shot in the arm to the economy. We’re sceptical, but if markets continue their recovery, and the data says OK, then expect more talk along these lines. 

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