Strange Recovery | Elliott Wave International

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Strange Recovery
Is it strange in here, or is it just...strange?

By Vadim Pokhlebkin
Tue, 01 May 2012 16:00:00 ET

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Something doesn't feel right. Look at this:

"Fiscal austerity and tough labour reforms have failed to create jobs, leading to an 'alarming' situation in the global employment market that shows no sign of recovering, the International Labour Organization said." (April 30, Reuters)

"Corporate profits come in unexpectedly strong. ... with more than half the companies in the S&P's 500 now having reported Q1 results, they've...delivered 6.7% growth... the 10th-consecutive period of profit increases." (USA Today, April 30)

Question 1: With companies making money hand over fist, why is unemployment still so high -- in the U.S. and elsewhere?

There's more:

"Homeownership rate drops.... The share of privately-owned U.S. homes fell to a 15-year low in the first quarter..." (April 30, Reuters)

and

"Home prices hit new post-bubble lows in February... The S&P/Case-Shiller home price index of 20 cities recorded a decline of 3.5% from 12 months earlier. Home prices have not been this low since November 2002." (April 24, CNN Money)

Question 2: With real estate prices at the pre-bubble lows, and with home mortgage interest rates near all-time lows, why is the home ownership rate even lower? Why aren't people buying?

Does any of this seem downright strange to you? Are you surprised? You don't have to be.

In his best-selling Conquer the Crash, EWI's president Robert Prechter outlined these exact conditions: A situation when confidence in "a better tomorrow" is so low that things turn very strange, indeed. That's why here at EWI, we are not surprised.

You don't have to be, either. Catch up and see what we see today.

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Tags: Bob Prechter, consumer confidence, earnings, Elliott wave, home sales, Robert Prechter, S&P 500, social mood, unemployment

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