Now that the squints at Cambridge (NBER) have stated that the yellow ball of burning gas hovering in the sky is in fact the sun and the bloviators are proclaiming that this is good news because it suggests that we are more than halfway through let's consider some 'conventional wisdom.'
First if stocks did bottom in November and we stay true to historical form that stocks bottom 58% through a down cycle, this 'recession' is already the longest since the Great Depression.
Second, stock market bottoms happen before employment & GDP improves, usually to the tune of several months. However as most folks know, employment numbers have been overinflated due to the birth-death model. Make-believe jobs were created in the make-believe expansion that existed throughout 2008 until the wayback machine at NBER said au contraire. Now, unless the rules are changed, the birth-death model should be taking away imaginary jobs exasperating the employment numbers.
Third, a GDP contraction is expected in the 4th quarter.
Fourth, the most optimistic scenario for employment improving is mid-2009.
Fifth, earnings season starts in 38 days. Unless folks starting beating the 'numbahs' then the argument that stocks have bottomed has no shelf life.
To summarize we are now in at least the longest down cycle since the Great Depression, and unless we see GDP improving in the 2nd quarter of 2009 and employment improving coincidentally, the markets are going lower than November. If the November lows are it we got off extremely lucky for that would mean we came in at double digit PEs at a bear market bottom, much better than 1973-1975 & 1981-1982.
That seems unlikely.