The economic picture this month seems to be getting less dismal than it was over the summer -- at least for investors.
The S&P 500 is up almost 5 percent on investors' suddenly cheery attitudes, the Wall Street Journal reports this morning. And, late last month, as the New York Times' Catharine Rampell pointed out, corporate profits returned to their pre-recession peak.
After a pit of bearishness near the end of August, the last two weeks have seen a 10-point and then 13-point boost in investor sentiment, according to the The American Association of Individual Investors. Investors are starting to take their money out of safe-haven Treasury bonds. The 10-year Treasury bond yield, which goes up when demand goes down, is up to 2.75 percent from 2.45 percent.
If, as n+1's anonymous hedge fund manager says, "the financial system is a way of accounting for what's going on in the real economy," then it doesn't seem to be doing a very good job. With August unemployment rising slightly to 9.6 percent, the larger economy seems increasingly disconnected from the market.
What do you think? Are we headed for a double-dip recession?
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