A kinder, gentler type of recession?

The preliminary estimate of fourth quarter GDP came in down -3.8%, a horrible reading, the worst we’ve seen since 1982. So why all the almost smiley faces around what’s left of Wall Street? Since Monday, all I’ve seen have been downward revisions to the expected decline. Yesterday some folks were looking for GDP to collapse at a rate in excess of -6.0%. The consensus developed that we would see a decline well over -5.0%. So, yeah, the number was bad, but not nearly as bad as the market had been braced for. That means not as low as the market had priced in. We’ll find out by the close whether or not a relief rally can take us up to the top of the trading range that has been developing in the last few months since early October.  Regardless of whatever happens today, this diminution of disaster before seeing the second half of the TARP funds or any of the stimulus money, suggests America’s economic resiliency may still be in good working order.  We should certainly all hope so.