I wont make a call that the economy or the stock market is ready to surge tomorrow, but the current atmosphere looks like a bottom. The bottom is not a flat line however. Look for stocks to trade wildly from one end of a range to another, as well as commodities, with stocks making higher highs and lower lows while commodities do the reverse.
What's different now from last month? Earnings are coming in stronger than expected. Oil use is dropping in the world's biggest market. The president lifted the executive order banning offshore drilling, the public is overwhelmingly in favor of more drilling in addition to alternatives, T. Boone Pickens even put forward his own energy plan.
The fed reacted quickly and decisively to the current downturn. While you may debate the actions taken, the problem was quickly acknowledged and dealt with. Stimulus checks were approved early on. Again, even if you don't agree with the method, the fact that the government was able to react so quickly to a downturn is a notable achievement. The government managed to largely stay out of the housing market. They did put systems in place for borrowers and lenders to communicate and negotiate more directly and efficiently, but did not take control.
Good news broke out. In Iraq, we may be ready to bring home as many as 100,000 troops by Spring (although 30,000 may wind up in Afghanistan, still a good net draw-down). Iran has been rattling its sabre, but behind the scenes, seems ready to deal. Oil inventories are up, consumption is down, new fields have been discovered and new technology is bringing new options online. We may not all agree on what specific action we take from here, but one thing is clear: Americans are tired of being sick, and sick of being tired. We will not sit still and simply let the world "happen" to us.
The US is poised to recover much more quickly than other parts of the world. It seems that Europe and Asia are only now beginning to feel the pain. Transparency makes all the difference. The US took its medicine at the first sign of symptoms. Interest rates came down, despite a weak dollar, banks wrote off bad debt and tightened credit requirements. In other countries, mistakes and short-comings are often covered up. Bad debt may remain on the books for years. If you don't acknowledge a problem, you can't adapt for it.
The pain may not be over, but I think the hemorraging has been contained. A lot of people lost a lot of wealth and assets, but this is America. We dust ourselves off and do it again. Hopefully a bit better prepared for the next, inevitable bumpy patch.