Wednesday, August 05, 2009

Bloomberg U.S. Financial Conditions Index Reaches A 21-Month High; The Recession Is Over

I'm not sure why the Bloomberg U.S. Financial Conditions Index doesn't receive more attention. It's updated daily by Bloomberg, and assesses the relative strength/weakness of the U.S. money market, bond market and equity market, and is considered a useful gauge of bank lending conditions and the overall availability of credit (see Bloomberg video below from September 25, 2008). The Financial Conditions Index went above -1.00 on Monday for the first time since October 31, 2007 and is now at a 21-month high (see chart above).

The recent strength of the Financial Conditions Index provides yet another piece of evidence that the recession is over, and further confirms Larry Kudlow's suggestion that we are in a "new bull market heralding a new economic recovery."

Bloomberg video from September 25, 2008:


At 8/05/2009 8:12 PM, Blogger RichmondG30 said...

I am confused. The chart at the top of the post looks nothing like the chart on the imbedded video from Bloomberg. The headline implies good news ("Bloomberg U.S. Financial Conditions Index Reaches a 21-Month High; The Recession Is Over"), but the video talks about the worst (tightest) credit conditions in years. I think some clarification is in order, no?

At 8/05/2009 8:19 PM, Blogger Mark J. Perry said...


The video is from Sept. 25, 2008, sorry I didn't clarify that. The Bloomberg video is one of the few sources I could find that describe the Finanical Conditions Index.


At 8/05/2009 8:35 PM, Blogger RichmondG30 said...

"The video is from Sept. 25, 2008"

Ahhhhhh. That makes more sense! Thanks.

At 8/06/2009 8:13 PM, Anonymous Anonymous said...

When is Larry Kudlow not heralding a dawning of a new age of prosperity? Didn't Larry call for Greenspan to lower interest rates and berated him when he didn't do it fast enough. I think Kudlow is more a cheerleader than a economist! I would choose another more well respected economist for your quotes.


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