Is the recovery just around the corner?

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Because the signs of the economy bottoming seem to be everywhere, analysts are trying to call the day when the recovery will begin. Most seem to think that it will begin in earnest in the last quarter of the year or early in 2010.

There are more and more economists who are convinced that GDP growth will turn positive again in the third quarter, but their position seems nearly impossible to defend.

According toReuters, the Blue Chip Economic Indicators newsletter surrey of economists says that "growth is forecast to resume in the third quarter." There are several critical factors that argue the chances of such an early recovery are not true, the most important one being that consumer spending, which makes of the largest part of the GDP, is unlikely to improve that quickly.

One of the hallmarks of this recession is that banks and credit card companies are withdrawing access to credit, cutting the number of credit cards that they have issued and fighting to make their customers make payments on schedule. Without access to money, consumers cannot get back into the retail market with any force.

Until the financial institutions start lending, especially to individuals, no recovery is going to take hold.

Douglas A. McIntyre is an editor st 24/7 Wall St.

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