The Economy is on the Mend

I’m ready to place my bet. The economy is on the mend. How do I know? Well, there are no eye witnesses, but there is so much evidence. I can point to observable messages being distributed in the market.

Message 1 – Ben Bernanke spoke to Congress and advised them that a recovery is likely to start sometime in 2009. This is slightly more optimistic than a month ago

Message 2 – President Obama addressed the nation in a very positive manner last night. The tone was positive and purposeful. The doom and gloom that he frequently mentioned prior to the stimulus bill becoming law is gone.

Message 3 – Sun Trust bank is airing commercials that reflect the mood of the average US citizen – living in excess is over. Saving and living with less is quite alright. Simple nights with family and reading a book are worth a lot.

Message 4 – James Surowiecki in the New Yorker is running an article and a couple of blog entries. The article is about how cutting pay is very rare and even though there are many layoffs happening, salaries are increasing. So if you can keep your job through your company’s layoffs then there is a good chance of reward. Your productivity will certainly warrant it. The blog entries discuss how authority figures (the President) simply talking about the Depression worsens the economy. It makes people hunker down. The focus going forward will be on the different successes and a more positive tone will come from people like the President.

Message 5 – There is a coming demand surge. Consumers can go without new shirts and pants, an updated refridgerator, and fancy restaurants. But at some point all those items, including the restaurant, will be needed again. In the mean time many companies will go out of business and there are deals to be had. The market will clean up the inefficiencies and several new power house companies will emerge.

Message 6 – Envy is taking a backseat to sensibility. Keeping up with the Joneses?

Message 7 – Northern Trust had a big party that is associated with golf, musical groups, and high end hotels and eateries. This is a company that was infused with Government money through TARP. And yet the reaction from the public isn’t all negative. People are let down by Northern Trust for being so lavish, but many understand why the party was held and that this isn’t the same as Citi bank. This is a profitable company conducting business, perhaps it is unwise in the current environment, but this management seems to be doing a lot right.

There are many more instances I’ve noticed but the point is made. The negative news still circulates, but the amount of positive news is growing and is diverse in its focus.

Working Thoughts 02/25/08
Ken Chenault 2007 vs 2006 Compensation


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One response to “The Economy is on the Mend”

  1. The economy hopefully is on the mend. But it is on the back of the American Tax payer and China. American bankers and wall street should be tarred and feathered.

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