Dude, Where's My Depression?

Economist Michael Darda of MKM Partners points to some rays of sunshine:

1) The yield curve spread, a classical leading indicator, has turned up.

2) And unlike the Great Depression or the Japan experience in the 1990s, broad money growth has picked up dramatically.

3) The credit markets, while not back to normal, have improved significantly from last fall/winter.

4) At the same time, industrial commodity prices appear to have bottomed. This flies in the face of the idea that the global economy is falling at an increase Indeed, the message from the financial indicators listed above along with sensitive commodity prices may be that global demand is now stabilizing.

5) Although the Index of Leading Economic Indicators (LEI) is still negative on a six- and 12-month basis, the declines have started to moderate, which is a prelude to a turn. We continue to expect growth to return by the fourth quarter of 2009.

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