From Barrons. This is only a portion of it and my apologies but I couldn't link it properly:
March 18th, 2002
The Perfect Recovery
Nancy Lazar says the economy is far stronger than most people think
By Sandra Ward
In the summer and fall of 2000, when everyone else fretted about inflation and interest-rate hikes, economists at the International Strategy and Investment Group sensed a shift in the wind and took a different tack. The firm warned clients of a coming slowdown in corporate profits and a downturn in the global economy that would be more severe and longer lasting than anyone then imagined. They called it the Perfect Storm, and they were right.
This past autumn, with the U.S. reeling from terrorist attacks and outlooks for global economies at their grimmest, Ed Hyman and Nancy Lazar again saw the world differently. The worst was over, they said. The economy was likely to touch bottom in the fourth quarter and a recovery was getting under way. U.S. gross domestic product was going to be stronger than expected, their research showed. At the time, they forecast GDP growth of 3.5%-4% for 2002. The surge in the stock market, in October and November was a "classic end-of-recession" rally. They forecast the Perfect Recovery. They appear to have been right again.
Lazar blithely dismisses fears of a "double-dip" recession occurring in the second half, relying on history as a guide: There's never been a double-dip in the first year of a recovery. There's never been a down quarter in the first year of a recovery based on 1954, 1958, 1961, 1971, 1975, 1983 and 1991. |
