GDP up 2%

Economic news today is that the GDP increased 2% for the last quarter, compared to an estimated 1.8% and up from 1.3% in the last quarter. To me, it seems the economic recovery continues, slowly, but continues.

I think the Great Recession, despite being in recovery mode for about 3+ years, really ended a few months ago with Housing appearing to have bottomed. Housing generally leads an economy out of recession.

In addition, autos and light trucks are doing very well, further signaling a healthy economy.

Corporate investment is flat, but for now that is OK, as representative of unemployment which is a lagging indicator of economic recoveries.

As for the "fiscal cliff," which some think will start a new recession, I will be surprised if a recession begins because of that. I think the recovery is now pretty much in self-recovery mode, so now is the time to begin reducing the deficit, plus the fiscal cliff is really  a misnomer since not all effects from it happen right away, plus there will likely be some modifications made within the next few months.

There is also a concern about Bernanke leaving the Fed next year. I do think there is appropriate worry if he is replaced by someone who takes a different approach. Although I do think Bernanke was complicit in the Housing Bubble, I think he has been very good since the bubble burst and his QE's have been very important in capital formation by way of a rising stock market and strong Treasury bond market. A lot of capital AND debt was erased by the Great Recession financial collapse.

The stock market has been overdue for a correction and there usually is a year-end rally. And, the year after a presidential election is usually a time to be defensive, but the stock market is not in bubble territory, so any weakness is just an opportunity. History does show that the stock market does do better with a Dem president than with a GOP president and I see no reason for exception for the next four years. as of now.