The Washington Postand Los Angeles Timeslead with a look at a number of indicators that could signal the economy may be starting to turn around. No one is trying to suggest that the pain is anywhere near over, but there's at least some hope that some markets may have reached bottom. Good news from the financial sector, and not-as-bad-as-expected news from retailers, sent stock markets soaring once again, and the Dow Jones industrial average increased 3.14 percent. The New York Timesleads with explosive allegations that some of President Robert Mugabe's cronies are abducting and torturing opposition leaders to push them to grant amnesty for past crimes. Impressively, these claims don't come from the opposition but rather from senior members of Zimbabwe's ruling party who talked to a local journalist working for the NYT.
The Wall Street Journalleads its world-wide newsbox, with the continuing high-seas standoff near the coast of Somalia. The U.S.-flagged Maersk Alabama, a cargo ship that was briefly seized until the crew managed to retake control of the ship, continued on its route as four Somali pirates held the ship's captain hostage in a covered lifeboat that has run out of fuel. The Navy, which has a destroyer on the scene, is trying to get the pirates to release the captain with the help of FBI hostage negotiators. USA Todayleads with a look at how the compensation gap between government workers and private employees is growing, primarily because of benefits. Last year, benefits for public employees increased three times more than for those working in the private sector.
Experts warn that the unemployment rate is still set to increase and will reach double digits this year. But there's hope elsewhere. President Obama's top economic adviser said that even though he could not say when the recession will end, "this sense of free fall ... will be arrested within the next few months." Wells Fargo, one of the country's largest banks, announced that it expects to report record first-quarter profits, news that the LAT says "stunned Wall Street." A report that predicted the nation's largest banks would likely pass the government's "stress tests" also pushed investors to hit the buy button. Wall Street "reacted as if the news marked a turning point for the battered banking industry, and perhaps the larger economy," notes the LAT.
Adding to the optimism, the government reported that exports rose in February for the first time in seven months. Retail sales were down from a year ago, but there are signs that the losses are stabilizing while some retailers are sounding downright optimistic. The WP points out stocks have increased more than 20 percent since their March lows in what the NYT calls "one of the most dizzying bear market rallies in Wall Street history."
Despite all these encouraging signs from the economy, many are warning that the Champagne should be kept in the fridge for now. Experts say that even if the economy has, in fact, reached bottom in several sectors, that doesn't mean recovery is right around the corner. "It's going to be a long, slow 'U' shaped recovery, not a 'V,' " one retail expert tells the WSJ. The NYT is by far the most cautious and warns that more deep losses could be right around the corner. "I think this is all setting us up for a new low," an equity strategist tells the NYT. "It's not like I'm praying for it to happen, but it's pretty much expected." Companies are likely to report big losses in the first quarter, and even though some banks may sound optimistic, their troubles are nowhere near over. But for now, "investors are setting aside those concerns and grasping good news with vigor," declares the NYT.
Just because some parts of the economy may be recovering doesn't mean the housing market is anywhere near ready to bounce back. Sure, some buyers have been taking advantage of cheap prices to buy homes for the first time or to refinance existing mortgages, but USAT makes it clear that the "unprecedented glut of vacant homes … will change the real estate landscape for years." Currently around one in nine homes is empty. There are 14 million empty homes, and 9.4 million that are for sale. "From a pure need for shelter, we don't need more homes built for the next several years," a real estate analyst said. Some areas will recover sooner than others, but it might take until 2014 for the country to deal with what is ultimately an unprecedented oversupply of housing. In the meantime, the NYT fronts a look at how squatting has become increasingly popular. Advocacy groups are moving homeless people into foreclosed homes, some of which cost hundreds of thousands of dollars a couple of years ago. For the most part, it seems neighbors and overwhelmed police departments are willing to look the other way for now.
The WSJ reports on its latest survey of economists that found most expect the recession to end in September, although unemployment won't decrease until late 2010. One economist explains why the end of the recession doesn't mean the beginning of the recovery by comparing it to a boxing match. "Even if you win the fight," he said, "it's not going to feel as good when you get out of the ring as when you went in." If the forecasts are accurate, the WSJ points out that the unemployment rate is going to hit its highest levels right around the midterm elections, "possibly bad news for Democrats."
Four "Mugabe confidants" told a local journalist, who for obvious reasons isn't named, about how some Mugabe loyalists are obsessed with the amnesty issue, while others seem more interested in using violent tactics to get the opposition to simply quit the government. To recap, the opposition has a majority in Parliament for the first time since Zimbabwe's independence. After an election that was marked by violence, Mugabe and the opposition agreed to a power-sharing deal. Now, "Zimbabwe is in the midst of a treacherous passage from authoritarian rule to an uncertain future," particularly since his cronies know that it's only a matter of time until the 85-year-old will no longer be around to protect them. And once that happens, they have plenty to worry about because Mugabe was never shy about using terror tactics to retain his hold on power. The opposition, of course, isn't willing to voluntarily offer amnesty, so Mugabe's men are trying to push them in that direction the only way they know how: carrying out even more crimes.
The NYT fronts, and everyone covers, CIA Director Leon Panetta's announcement yesterday that the agency no longer operates any of its secret overseas prisons where al-Qaida suspects were tortured during the Bush administration. Panetta also said the agency hasn't taken anyone into custody since he took the job in February. In a statement to employees, Panetta said those who worked in the secret program "should not be investigated, let alone punished" because they were repeatedly assured that what they were doing was legal. The 14 prisoners who were being held in the so-called black sites were transferred to Guantanamo in 2006, but apparently at least some of the secret prisons were still being maintained.
The WP's Eugene Robinson writes that he knows many Americans are grappling with economic uncertainty and "would rather look forward than revisit the past," but the "business of torture … is too unspeakable to be left unresolved." The recently released Red Cross report makes it clear that the interrogators tortured prisoners with the help of medical personnel in what amounts to "barbarity with an ugly sheen of bureaucracy." Although some have pushed for some sort of "truth commission" to document all the ways that the Bush administration broke the law, Robinson says that isn't enough. "Torture—even the torture of evil men—is a crime," he writes. "It deserves not just to be known, but to be punished."