Think back to that dark time, only two years ago, during the winter of 2008. President Obama had just been inaugurated and the accompanying pomp and circumstance offered only a brief respite from the drumbeat of bad economic news that had become our fare. The housing market had crashed and record foreclosures ensued. Many people had lost their jobs already and many more would lose their jobs in the intervening years, this cycle begat even more home losses. All of the markets were down; the Dow had dipped below 8,000. This was the Great Recession at its nadir or was it? If the Great Recession were to follow the prescription laid out by the Great Depression then that dip was not the end of our economy’s downward ride, but only the pause before the storm.

In the last two years the housing market has not recovered. Likewise, neither has the job market show much new life and the Democrats took a “shellacking” in last year’s midterm elections. The one bright star in the financial picture has been the stock markets. The Dow has led the charge and has risen by 50%, to 12,000. If blame is to be applied to a president for events on his watch, then so should credit. A 50% rise in stock prices is not too bad for a socialist. 😉

If the Great Recession does aspire to become the Great Depression II then most economists, just don’t see it happening, but then they didn’t see it in the first place either. It is much easier to study a threat that has shown its danger than it is to observe the unknown one. One is sure to be more careful about a dog that has already bit them than a dog that one not seen. I think that the record of the last two years speaks to this. A near-term catastrophe has been averted, even if much pain has not. The economy is moving forward, if even with a limp.

So where do we go from here? Improvement in the job market is expected, even if it doesn’t come soon. The housing market will take longer. Fortunately, for me, I have a job and a house and I’m not expecting to lose either of them soon. Two winters ago, I wished that I had put on the bear suit though. It would have protected my portfolio. In the intervening years I have benefited from going bare, not wearing the suit and remaining in the equity markets.

There is an old adage about the stock market, “Sell in May and go away.” It speaks to the traditional summer doldrums that plague the markets. The problem with this adage is that it requires putting the bear suit on in the middle of the summer. This sounds too hot and scratchy a proposition for me. I could move up to Canada, where it is cooler, but what then if I meet a real bear. Any of my lukewarm bearish “feelings” would falter quickly when faced with a real bear’s charge. I think instead, I’ll just rebalance my profits and then visit the zoo.

This post’s tasty eye candy is of course courtesy of Chris. Chris also gave me the tittle for this post. Checkout his photography page on RegenAxe.