THE ECONOMY HAS BOTTOMED OUT: THE ASTUTE BLOGGERS SCOOPS KUDLOW/NRO BY A WEEK

THE GREAT LARRY KUDLOW TODAY:

Bottoming Signs [Larry Kudlow]

Here and there are some small signs that the economy is at least bottoming — a crucial stepping stone to meaningful recovery.

For example, the ISM non-manufacturing services report released today for December came in at 40.6 on the composite index, compared to 37.3 in November. New orders, employment, backlogs, and exports all ticked higher than the previous month. So did the overall-business-activity index. It’s still a recession reading, but a small increase is better than a decline.

The November factory-orders report showed non-defense capex rising at a 3.9 percent annual pace, the first increase in four months and the best gain in 10 months. Computer orders surged 12.5 percent.

Pending home sales — which tracks home re-sales under contract, according to the National Association of Realtors — declined again overall. But out West pending sales continued to increase, and they are up 27 percent since the August 2007 bottom.

Commercial construction rose 0.7 percent annually in November, and is up 12.1 percent over the past three months.

And in the November personal-income report, real disposable income jumped 1 percent for the month and is up 7.1 percent at an annual rate over the past three months. Real consumer spending in that report rose 0.6 percent in November.

... The gasoline drop is probably worth $350 billion as a consumer-purchasing-power tax cut. This is a key recovery mustard seed. So is the outsized growth in the money supply as measured by M1 and M2, fueled by the gigantic increase in the monetary base as the Fed continues to expand its balance sheet.

Additionally, the credit freeze continues to thaw.

01/06 04:28 PM

THE ASTUTE BLOGGERS A FULL ONE WEEK AGO:

SOME PROOF THAT THE ECONOMY HAS BOTTOMED OUT AND IS HEADING UP...

CNNMONEY: BONDS ARE STEADY: Bonds hold tight in thin trading

With little money going in or out of Treasurys to close the year, bonds make very small movements despite two dour economic reports.Treasurys were little changed Tuesday, even after more dour reports on housing and consumer confidence.

Bonds have traded in a close range for the past two weeks, with very subtle changes brought on by ultra-thin trading heading into the last days of the year.

"With year-end trading, a lot of people are staying on the sidelines," said Peter Cardillo, chief market strategist at Avalon Partners.

"Bonds have been strong, so it will take a lot in the market to change them significantly," he added.

THE FLIGHT HAS PANICKED ENDED...

CNNMONEY: Jobless claims down sharply

Filings ease in Christmas week to below the 500,000 level, backing away from 26-year high.

The number of Americans filing for first-time unemployment benefits fell sharply last week, according to a government report released Wednesday, as a year filled with layoffs and income cuts draws to a close.

The Labor Department said initial filings for state jobless benefits fell to 492,000 for the week ended Dec. 27, a decline of 94,000 from the 26-year high of 586,000 claims a week earlier.

BLOOMBERG:Libor at Four-Year Low as Central Banks Offer Cash, Cut Rates

Dec. 31 (Bloomberg) -- The cost of borrowing in dollars in London for three months dropped for the third day, ending 2008 at the lowest level in more than four years as policy makers provide cash and lower interest rates.

The London interbank offered rate, or Libor, for such loans fell one basis point to 143 basis points, the least since June 8, 2004, according to British Bankers’ Association data. Singapore’s comparable rate for U.S. funds slipped one basis point today to 1.44 percent, the lowest level since June 2004. The Libor-OIS spread, a measure of cash scarcity, narrowed.

“There’s no reason for the easing in rates not to continue,” said David Keeble, head of fixed-income strategy in London at Calyon, the investment-banking unit of Credit Agricole SA. “The banking sector is more stable and cash is coming into the system.”

• I PREDICT: THINGS ARE GONNA GET BETTER FASTER THAN MOST PEOPLE THINK.

• APRIL-MAY THINGS ARE OKAY.

• WE CITED DIFFERENT, EARLIER DATA, BUT WERE RIGHT ON TARGET - BOLDLY ASSERTING WHAT FEW OTHERS HAD THE BALLS TO ASSERT.

• NOW KUDLOW COMES ALONG AND FINDS NEWER DATA WHICH CORROBORATES WHAT WE FIRST WROTE.

• PROVING ONCE AGAIN THAT WE DON'T JUST FOLLOW THE PACK; WE LEAD.

• REGULAR READERS KNOW THAT THIS HAPPENS ALL THE TIME.

SPREAD THE WORLD. BOOKMARK US. BLOGROLL US.

BY THE WAY:

THIS EXPLAINS WHY OBAMA AND BIDEN ARE TRASH-TALKING THE ECONOMY (SEE EARLIER POSTS HERE AND HERE):

THEY NEED TO TRASH-TALK THE ECONOMY IN ORDER TO CREATE THE FEAR NECESSARY TO PASS THEIR SOCIALIST AGENDA WITH THE MEGA-DEFICIT AND ALL THE PORK.