By Al Walsh
Although this pervasive recession/depression continues to hang over us, and I believe the worst is yet to come, there are small positive signs. Following is a recap of recent observations; many of which I’ve previously shared:
- Commercial credit is showing signs of loosening up – although the “jury is still out” as to who will qualify.
- Durable goods orders are up – indicating some positive stirrings in industry.
- Housing sales are marginally up – although I expect more “dark days” ahead as people use up their unemployment benefits and more mortgage resets occur. I’ve heard talk of Washington extending unemployment benefits further, which may help matters if they go through with it.
- Businesses have begun receiving federal funds for energy development. So far, most of the money has gone to big business. Not much help to entrepreneurs, but good for jobs and business in general. Smaller companies may receive some indirect benefits via subcontracts from the major recipients.
- The “cash for clunkers” program is popular, spurring auto sales.
- The stock market’s shown signs of life, although I expect dangerous volatility ahead.
- Imports are marginally up, indicating some “fresh breath” in consumer spending. This will help the shipping lines and common carriers.
- Headhunters I talk to tell me that they’re starting to see some increased hiring action. Nothing to get excited about yet; but a start.
- Consumer saving is on the rise. The saving rate has been dangerously low for way too long. The funds deposited with banks should help marginally ease the credit freeze by providing a base for new lending. Let us hope the banks don’t just sit on it, like they did with the bailout money.
- The rate of IPOs (Initial Public Offerings) is slightly up, providing a positive sign that investment capital is starting to “come out of the woodwork”.
- Industry in general reduced inventories drastically; a mixed-blessing but one that provided cash flow for survival and which will provide a platform for ramped-up production as we come out of the recession/depression and demand increases.
- Consumers are going through the painful process of deleveraging from the high credit positions they’ve been in for years. Of course many without jobs are increasing those positions for survival, but in general the nation is going through a forced shedding of some credit burden; which is a good thing.
- Other nations are starting to see signs of recovery, including the UK and China.
None of these factors are of great significance themselves, but together they offer some rays of hope.
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