Dr. Booms Come to Fore Amid Recovery Signs
By Kim Tae-gyu
Staff Reporter
As the economy shows signs of recovery, ``Dr. Booms'' have come to the fore to replace ``Dr. Dooms.''
Spearheading the pack is Goldman Sachs Group strategist Abby Joseph Cohen, who claims that there hasn't been a recession yet that hasn't ended.
``Things are looking less bad,'' Cohen said in a recent radio interview. ``Recessions are difficult and uncomfortable when you are going through them, but they do end.''
She predicted the U.S. economy will expand in the second half of 2009 and profits at S&P corporations will amount to as much as $40 a share on average this year to boost stock markets.
The economist, who has the moniker of Abby Bullish Cohen, achieved fame by predicting the long-standing rallies in the 1990s but lost the hard-earned reputation when the high-tech bubble burst in the early 2000s.
She lost ground once again by failing to foresee the stock market crash in 2008. Since then, she's rarely been quoted by the media, but has received renewed media interest recently, with financial markets recovering to some extent.
Even some former pessimists have defected to the optimists' club, as demonstrated by Paul Farrell, a regular contributor to MarketWatch.
Farrell competed with Prof. Nouriel Roubini at New York University to come up with more dire predictions but he's now contending that the bottom is in and it's time to buy stocks.
``Ok, so you're one of millions of investors impatiently waiting on the sidelines, sitting with $2.5 trillion cash under your mattress, waiting for the right moment, that signal screaming: `Bottom's in, start buying!' '' Farrell said in his recent contribution to MarketWatch.
``Yes, it'll go down again, but the bottom's in, thanks to a great March, possibly the third-best month since 1950, so it's time to jump back in and buy, buy, buy!'' he said.
In comparison, Roubini and Paul Krugman remain on the bearish side.
``Compared with bullish consensus that sees positive growth at 2 percent by the third and fourth quarters of this year and a return to potential growth by 2010, my views are consistently more bearish,'' Roubini said in his column in Forbes early this month.
``I see the latest rally as another bear market rally, as over the next few months, the news by consensus will be worse than expected,'' he added.
Nobel economy laureate Krugman of Princeton University is on the same page with Roubini that ``the light at the end of the tunnel'' is not visible, yet.
Early last week, Krugman said in New York that people are resorting to overly optimistic conclusions and that there are no real signs of recovery.
In Korea, President Lee Myung-bak is one of the most prominent optimists as he projected that the benchmark KOSPI will touch 5,000 points under his tenure.
The index, which was just below 2,000 when Lee took the office last February, fell to below the 1,000 level last November and this March, muting the businessman-turned politician.
Lee has yet to resume his super-optimistic prediction on the stock market and it remains to be seen whether or when he will step up once again as a ``cheerleader'' for the Seoul bourse.