False Signs of Recovery in Recessions

On July 16, I wrote the following:

“During periods of economic decline, it is relatively common to have periods of “relief” from decline – then a resumption of further decline. This is what I believe we are experiencing now, both in the economy as well as the stock market rally (which I have previously referred to as a “bear market rally.”)

Subsequent to that post, I ran across the following in the August 3 issue (p. 102) of Forbes.  In a column, A. Gary Shilling makes this comment:

 “False signs of a recovery are common in recessions.  Since World War II there have been 11 recessions, and in 8 of them real GDP rose in at least one quarter well before the recession was over.  Recessions don’t start at the top and go straight to the bottom.”

SPX at 940.38 as this post is written