Living in Canada, in almost every province, we are all very familiar with the January thaw. It is that wonderful time in the middle of the winter when the snow banks melt and you hope that it might not snow anymore while knowing that there is a long winter ahead.
The economy is similar in the way it moves.
It is true that there are indicators that a rebound is beginning; gas prices are going up, unemployment is slowing and the stock market is coming out ahead at the end of the day instead of regular triple digit losses. Economists and banks are reporting the recession is bottoming out and that things will now begin to return to normal.
I really hope that this is true.
This reminds of the time in the not too distant past when we were told to invest in tech stocks because they were “rock solid.” The same rhetoric is now being used and it sounds like it is coming from the same people.
Like the weather forecasters will tell you, “enjoy the January thaw because winter will be back soon,” there are economists predicting another dip before recovery (spring) will begin. While this prediction is not certain it is better to err on the side of caution and try to get as much out of the government as you can while they are willing to give it.