Recession more phantom than menace?

Just because everyone expects a downturn doesn't mean it's going to happen.

By Jim Cramer Aug 15, 2011 9:10AM

jim cramerthe streetIs it grudging recognition that, despite the political gridlock, despite the European woes, maybe not all is lost?

 

Have we discounted not just a slowdown but also an actual recession, one that might not occur? Could this be a repeat of 1987, when the market's decline presaged nothing other than a momentary loss of consumer confidence?

 

It's hard not to think about that when in the past 36 hours of trading we've had decent employment claims and some really good numbers from retailers Ralph Lauren (RL), Macy's (M) and Nordstrom (JWN), not to mention aggregate retail sales numbers.

 

It's hard not to question the recession thesis when Caterpillar (CAT) comes on national television and says orders are looking good, knowing that CAT is about emerging markets, not the U.S. and not that much about Europe.

 

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Recession-watch is a new game. The Great Recession sneaked up on us, courtesy of the fraudulence and laxity of the previous era. This time everyone is looking out for it, and, until we see some real doozies -- and we haven't -- we are going to brand Dillard's (DDS) and J.C. Penney (JCP) as ne'er-do-wells and accept that consumers are more like people who shopped excessively at Nordstrom, which had its best July event ever.

 

Recession is a two-way street: part Washington, D.C., part European. President Barack Obama was unable to hurt the market at the end of last week, which has become an unusual circumstance. Europe's one-two punch of a short ban and vacations has diminished the bad-news flow.

 

You know what? We'll take it!

 

At the time of publication, Cramer was long CAT.

 

Jim Cramer is a co-founder of TheStreet and contributes daily market commentary to the financial news network’s sites.

 

Follow Cramer's trades for his Charitable Trust.

8Comments
Aug 15, 2011 9:36AM
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End demand has been declining for a long time in this country. Middle class families have been struggling to keep up with increases in all the things they want and need to take care of themselves and their families. Until working people have enough discretionary income market gains will be muted. Politicians have missed the most important aspect of the demise of the middle class and will be repudiated for their misjudgment next year.
Aug 15, 2011 11:03AM
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Hot It's going to be a really slow recovery so get use to it. It's all about US growth impacted by globalization.  There's nothing the FED, Congress or the President can do about it.  The Democrats can curse and extend unemployment and the Republicans can pray and cut spending but neither will increase growth to 3%.  In fact cutting spending without real tax reform to increase revenue by eliminating deductions and loopholes will actually slow the economy down.  Take away the defense spending without shifting it to alternative energy and we'll lose more jobs.  Real corporate taxes need to be reduced while eliminating subsidies to hedge funds and oil.  Oh, well here comes those political TV campaigns full of lies.
Aug 15, 2011 11:00AM
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 The Great Recession sneaked up on us . . .
The Great Recession snuck up on Cramer because he was too busy hyping the markets for his buddies.    Many of us saw it coming and got safe.  
Aug 15, 2011 9:56AM
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"playing the stocks" is for the rich folk.  the average guy at best has a 401K program at work which likely doesn't even include any company matching and is mutual fund based.  your articles only point to that 2% of the population.  ~ who likely do not read your work
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LOL Right half the US workers who make less than $26,500 a year are all shopping at Nordstrom. Boy this economy is going to go down big time again by Christmas. 



Recession-watch is a new game. The Great Recession sneaked up on us, courtesy of the fraudulence and laxity of the previous era. This time everyone is looking out for it, and, until we see some real doozies -- and we haven't -- we are going to brand Dillard's (DDS) and J.C. Penney (JCP) as ne'er-do-wells and accept that consumers are more like people who shopped excessively at Nordstrom, which had its best July event ever.
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boy i gotta say using mexico for economic advise is pretty weak......... as if THAT country has it together!!!!!!!!!!!  holy cow! 
Pretty sure Mexico got out of it's trouble because we loaned them like $500 billion or something like that.

Pretty much Bernanke should just print up $1,000,000,000,000,000 dollars for each American and sent it to us. That would solve the US debt problem overnight. We would all become super rich over night.



Aug 15, 2011 1:24PM
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boy i gotta say using mexico for economic advise is pretty weak......... as if THAT country has it together!!!!!!!!!!!  holy cow! 

 

Corporate tax cut is the only answer.Mexico did that in 1997 when it's economy collapsed completely.They were back in less than 5 years.
Aug 15, 2011 11:44AM
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Hard to see how things improve as long as we have a moron in the white house.  One of the funniest thing Fred Imus, who recently passed, said on his brothers radio show, was, when asked if he had watched Obamas speech the night before, replied, "I started watching him, but when his first words weren't, I'm resigning effective....., I turned him off" 
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