Long time readers know I have expected a retest of the March lows. While the stock market has remained strong during the traditional September/October correction . . . so far, . . . I’m still worried. The Great Recession did a great deal of damage, unemployment will come down very slowly, and the economy must become more export oriented and less consumption oriented. That takes time. The lows of the Great Depression came about fifteen months after the Crash of ’29.

Now, it could be the lows of the Great Recession came in March of 2009, only six months after the crash in September of 2008. I hope so . . .

Another factor arguing that the worst is past us is the inventory cycle. Inventory levels have fallen a record eleven straight months. At some point, inventories must be rebuilt. At that point, the economic recovery will begin. I hope so . . .

Lastly, the continuing decline in the dollar will accelerate our transition from a consumption oriented economy to a more export oriented one. I hope so . . .