Green Shoots
When you talk to some people about spring, they think about all the dead vegetation that needs to be cleaned up.
I love spring because that’s when the crocuses begin to sprout.
It has been awhile since I have seen an economic recovery and I am reminded that it is as joyous as watching the crocuses bloom and push aside the death of winter.
Home Depot was in bloom today;
Home Depot said net income rose to $514 million, or 30 cents a share, from $356 million, 21 cents a share a year earlier, in its first-quarter ending May 3.
The Governor of the Royal Bank of Australia confirms what many are saying;
“It is too soon to say this is beginning yet, though developments over recent months are certainly consistent with the view that a recovery will get under way towards the end of the year.
But there are sad stories;
The Dow Jones Industrial Average hit a bottom at 6547.05 on March 9, a 12-year low and less than half its October 2007 level. Many investors like Ms. Brady cut their losses. Some $70 billion flowed out of stock mutual funds or exchange-traded funds in February and March, according to TrimTabs Research.
Since bottoming out, the Dow has surged 26%. That means investors who sold at the bottom have missed out on one of the most powerful rallies in decades. “Their timing was almost perfectly bad,” said Dennis Houlihan, a Fort Wayne, Ind., financial adviser who tried unsuccessfully to steer three of his clients away from selling in early March.
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May 19th, 2009 at 5:49 am
Ah, Home Depot! Ka-ching!
Ten-penny Nails From Heaven!
May 19th, 2009 at 5:50 am
‘That means investors who sold at the bottom have missed out on one of the most powerful rallies in decades’
You are a charlatan and a fool. And those who believe you are suckers.
May 19th, 2009 at 6:43 am
Hey Oak,
Thanks for posting the good news of the day. Let’s check out some other business news.
From Drudge—-Blue collar males lose more ground; unemployment rate surges past national average…
——————————————————————————–
Housing construction at record low…
‘STOOD FOR CHANGE, BUT ALL HE’S DONE IS BROUGHT NEGATIVE ECONOMIC CHANGE’… –from Nevada’s governor
Oil prices bounce above $60…
Tokyo – Mitsubishi UFJ Financial Group Inc incurred its first net loss since it began business operations as Japan’s largest banking group in 2005, it said Tuesday. Mitsubishi UFJ joined two other megabanks this month to report red ink because of the global financial turmoil
Daniel Och Stashes Cash as Hedge Funds Brace for Global Stock Market Slide
NEW YORK (CNNMoney.com) — American Express said Monday it will cut 4,000 jobs
May 19th, 2009 at 8:12 am
Good informational posts, as usual MI. I saw those Drudge posts too, and to me the economical earth is still shaking around.
Of course, anyone can cherrypick the “good” news. There will always be a few industries or business that will pick up as others go down. Thrift stores, big box stores and farmer’s markets are all doing better as a result of people spending money more frugally.
But, does this speak of a rebounding economy, or just people making do in an economy that is still in intensive care?
May 19th, 2009 at 8:17 am
Recovering…you are out of your mind. There are not gonna be any green f’ing shoots for years. Do you know of any industry that is going to be starting up in Michigan, Indiana, Ohio etc soon that is going to be hiring 1,000s per week? Hell no, the factories are gone – there is nothing left to restart the economy. Selling crap to fix up your home at lowes isn’t gonna do it. We have a complete clown who has never worked a day in his life in the white house that hates the country that elected him. Social Security is bankrupt. Out biggest state is bankrupt. Medicare is bankrupt. Baby boomers, the pampered generation they are didn’t save squat. The next generation will cut them off quick. Green shots my aching left nut.
May 19th, 2009 at 8:41 am
Spring is my favorite time of the year to. I threw out some cantaloupe seeds the other day for the birds because I thought they would eat them but I noticed over the week end that they had sprouted and are now growing like crazy. I like you post and I plan to keep up with you.
May 19th, 2009 at 8:56 am
drug rehab—-You need to get out in the world. I think it would be good therapy. Watching punkin seeds isn’t what it use to be.
May 19th, 2009 at 8:56 am
Jan-You are correct. creating a job for a clerk at the dollar store isn’t exactly an economic boon.
May 19th, 2009 at 9:50 am
Must watch RedState video.
Did the CIA lie to Nancy Pelosi?
If she is telling the truth, Pelosi is awesome.
May 19th, 2009 at 11:20 am
You can define a mythical creature with precision, observed St Thomas Aquinas, but that doesn’t make a phoenix exist. To be there, things actually have to have the property of existence. St Thomas would be a party-pooper in today’s politics, where “yes, we can” means that we can do whatever we want, even if it violates custom, the constitution or the laws of nature.
The television cartoon South Park offers a useful allegory for the administration’s flight from realism. In one episode the children’s teacher, Mr Garrison, gets a sex change, little Kyle gets negroplasty (to turn him into a tall black basketball star), while Kyle’s father undergoes dolphinplasty, that is, surgery to make him look like a dolphin.
Looking like a dolphin, of course, doesn’t make you one. Sadly, the Barack Obama administration hasn’t figured this out. Out of the confusion of its first 100 days, we can glimpse a unifying principle, and that principle looks remarkably like the sort of plastic surgery practiced in South Park.
Like dolphinplasty and negroplasty, it has given us cosmetic solutions that we might call civitaplasty, turning a terrorist gang into a state; fiducioplasty, making a bunch of bankrupt institutions look like functioning banks; creditoplasty, making government seizure of private property look like a corporate reorganization; matrimonioplasty, making same-sex cohabitation look like a marriage; and interfecioplasty, making murder look like a surgical procedure.
The analogy to plastic surgery holds in the field of foreign policy as well, where the president’s special ambassadors have fanned out to solicit the good graces of the world’s terrorists. The White House wants to get Iran involved in Afghanistan, offer the Taliban a power-sharing arrangement in Afghanistan, give Syria a key negotiating role, and pitch a Palestinian state with involvement from Hamas. Out of this witches’ cauldron, the administration hopes to conjure up a Palestinian state – call it civitaplasty. Giving guns and money to a collection of individuals on a given spot of ground, though, does not make a people, much less a state.
May 19th, 2009 at 11:52 am
Oak Leaf,
Read this:
“So here’s the scenario. In the next 12 months we will see all of these factors come together:
1. Dramatic expansion of government spending.
2. Falling tax receipts due to recession and increased marginal tax rates.
3. A projected $10T increase in Federal Debt.
4. Continued unsustainable structural deficit from entitlement programs.
5. Stabilized of financial markets.
6. More “green shoots” of growth creating early signs of inflation.
All of these factors will lead the Fed to conclude that interest rates must be increased, to drain excess liquidity out of the financial system. Unless rates get raised, there will be huge inflationary pressure. The party will be starting, and it will be time to take away the punchbowl.
However, there is one more fact that will come into play:
7. Unemployment will still be high.
This means that Congress and the President will NOT want interest rates to increase, lest the young “recovery” be hurt.
The result will be a showdown, and it will determine whether the dollar will continue to be the world’s reserve currency, and the US the largest financial services provider in the world.
In the coming weeks, you will start to see calls for Congressional influence or approval of the Fed Presidents. To set this up, there will be an increasing drumbeat from folks like Frank and Dodd as well as the Obama Administration (yes, Insty, the country’s in the best of hands) railing against the Fed, and blaming them for every little hiccup or setback, while taking credit for anything good. This will all be part of an effort to undermine the Fed, and position it for a Congressional takeover.
And when the takeover attempt is made, that will be the moment of truth, the time at which we will determine whether the housing bubble bursting will trigger just a really nasty recession, or the next Great Depression.
If Congress gets control of the Fed, the game will be over. Everyone in the world will know that the US is going to inflate its way out of its problems so that it doesn’t have to confront its lack of fiscal discipline. Bond prices will plummet, the dollar will collapse, and the economy will go back into the ICU. Inflation will punish the working man, while the investor class will be fine (inflation can be a good thing for equities and real estate).
If the Fed maintains its independence, interest rates will rise and Democrats will have to face the music and give up on most of their expansionist dreams. If they continue to spend, rates will continue to rise and we’ll get stagflation just in time for the 2010 elections. And they’ll get hammered, just like in 1980.
So Congress can tax and spend responsibly, or they can take over the Fed. Guess which they’d prefer.
From such a crisis of a nation comes the test of a generation.”
Then go here and read the whole thing:
http://pajamasmedia.com/richardfernandez/2009/05/18/the-death-of-kings/#comment-34
[Hey, I know where you are coming from. In 1992, I was a fire breathing Voodoo Stick supporter of Ross Perot. If you are old enough and paid attention, you would know exactly what I mean by my choice of words.
All that said, I have publicly stated that I went LONG in early March and posted one of the fund investments that I made. I also quoted the price of raw gold. (FTR, I consider investing in mines to be different than buying the metal.) I will have a report card on 12/31/2009, 09/30/2010, and 09/30/2012. We will know who did well and who did not.
I have the utmost respect for my fellow blogger who is a metals guy. Do I think metals or commodities have a place in a portfolio? ABSOLUTELY. I have about had about 10% in oil and/or gold ever since I started investing right out of high school. Its called balance. The raw gold that I have has also been my worst investment but overall, its just 10%. Some guys do make money in gold and mining companies but they are traders not holders. My fellow blogger knows gold and I have the utmost confidence he can generate cash and still own the commodity by the end of the week.
What I think is nonsense is assuming the worst case scenario and even worse, investing because of politics. There are crack pots who have frequented this blog and if what they write is true, are literally stockpiling weapons and gold. Thats called investing by emotion, which I have been guilty of, been there done that in 1992 and it took almost three years to get off the pot.
As I read your diatribe I am reminded of Al Gore and global cooling, which morphed to global warming which is now climate change.
I no more believe that the earth is at risk from man made climate change than I believe we will have economic collapse before Obama leaves office.
Are parts of the US in dire straights? Hell yes!! I stand with the good people of Michigan and want them to get all the help they can as they were hit by an economic hurricane. But if things were so dire, I would not be able to find major companies every day that are doing far better than anyone expected.
Was I "highly concerned" in late 2008? HELL YES!! But I put my emotions aside and started dollar cost averaging back in while holding my breath. But come March, it started to appear that the actions taken in the fall had worked.
Bottom line, no politician can destroy the highly versatile and creative American economic engine just like man can not destroy the earth that God created.
Oak Leaf]
May 19th, 2009 at 12:14 pm
The dollar will collapse??? Isn’t it already? Good Post Trent.
However-I suspect that your analysis is a little to hard for Oak to understand. Can you dumby it up a little?
[Here is what you have to ask yourself. If you subscribe to the Zimbabwe Theory, you do understand that your gold plated pension and BCBS is history. So what are you doing? Are you buying bricks of ammo with your paycheck? Are you buying bags of circulated silver coins with your pay check? Have you liquidated 80% of your cash from accounts to buy the above?
I think individuals hoarding silver bags and ammo bricks for fear of "Mugabe" are wackos.
I think individuals talking about "secession around the corner" are wackos.
I think individuals talking about the earth running out of resources are wackos.
I think individuals talking about the US Army rounding up privately held firearms in our lifetime are wackos.
I think individuals that say 911 was an inside job are wackos.
I think individuals that say Obama is not a citizen and is an illegal President are wackos.
I realize that some of my posts strike a certain "forbidden nerve" with some Conservatives. I know the emotion and I understand the reaction. It is hard to rationalize anything good happening when one believes the President is "evil incarnate."
History shows the US Economy is extremely resilient. Dr. Doom for as great a pessimist, yet has "remained fully invested in stock index funds."
I have the utmost confidence the US Equity markets will be higher in December, higher before the next election and higher before the election after that. Saying just that makes me an "apostate" in the eyes of some on the right.
Oak Leaf]
May 19th, 2009 at 1:33 pm
Unfortunately, Trent, I see your analysis more probable than not. I have never seen such a quiet and relentless take over of everything by government. Just look at Drudge’s headline involving “GM’s quick sale to the government.”
MI your name has been bantered around at BJG Blog. There are questions as to why you are not posting there any more. Everybody wants your input, MI —-> popular guy!
May 19th, 2009 at 3:40 pm
OL
I don’t see people as having too many other sane options but to stay fully invested in the stock index funds, if they have the staying power to do so. Those who sold in the mid 6’s paniced and lost a ton. People who know better are just trying to ride it out, and that includes staying put even when the stock market tanks again.
Even though the United States has a resilient economy it has been severely wounded and burdened by debt beyond our comprehension. I don’t think anyone has a crystal ball as to what will happen, let alone depend upon historical references as to reassuring ourselves of the immediate or future soundness of our financial health.
May 19th, 2009 at 4:33 pm
From Irvine Housing Blog
It is conventional wisdom in the housing blog community (and the OC Register) that a giant wave of foreclosures is coming later this year, but what facts do we have that support this thesis? Today, we take a look at the available data and show this wave in its formative stage.
May 19th, 2009 at 4:36 pm
I don’t like the “wacko” label for the conspiracy theorists just because of what happened in Vietnam and other similar events. The left and right got fired up and spent a decade yelling at each other and marching around only to find out that the entire thing was a (sick) practical joke in that the Gulf of Tonkin attacks were fabricated to manipulate public opinion.
It’s hard to get people to want to pay taxes for these things or send their children off to the government so they needed a rational.
Lots of people distrust the government, and a lot of it is insane, but I think people are better off if they veer on the distrust side of the coin since that’s usually the more legitimate side. Plus the government rarely has your interests at heart unless you’re a powerful interest group.
May 19th, 2009 at 4:45 pm
Ahem,
May 19th, 2009 at 4:47 pm
Go wash your hands, little boy…
May 19th, 2009 at 6:28 pm
The Colonel is behaving himself for his marxist boss, like a good little pet. And nice job of avoiding the issues en masse.
Well that’s how you got your eagles, and your leaves before that, so congrats.
Still wrong, however.
I have an idea for you to post on: How about a post saying the unemployed are basically unemployable, and should no longer be included in any estimate of the economy’s health? Why not call them “Useless eaters”? That seems like a bright idea. Since you think that socialism and prosperity go hand in hand.
We’re all waiting….
May 19th, 2009 at 6:31 pm
Green Shoots:
* The Conference Board LEI for the U.S. declined again in March, and the index has not risen in the past nine months. Building permits, stock prices, and the index of supplier deliveries made large negative contributions to the index this month, more than offsetting continued positive contributions from real money supply and the yield spread. In the six months through March, the index fell 2.5 percent (about a -4.9 percent annual rate), faster than the decrease of 1.4 percent (a -2.7 percent annual rate) for the previous six months. In addition, the weaknesses among the leading indicators have remained widespread in recent months.
* The Conference Board CEI for the U.S. continued falling in March, driven by further declines in employment and industrial production. In the six months through March, the index decreased 3.0 percent (about a -5.8 percent annual rate), faster than the decline of 2.0 percent (a -3.9 percent annual rate) for the previous six months. In March, the lagging economic index for the U.S. fell by the same amount as the coincident economic index, and as a result, the coincident to lagging ratio remained unchanged. Meanwhile, real GDP contracted at an average annual rate of 3.5 percent in the second half of 2008 (including a decline of 6.3 percent annual rate in the fourth quarter).
* The Conference Board LEI for the U.S. remains on a general downtrend that began in July 2007, with widespread weaknesses among its components. However, its rate of decline has moderated somewhat this year. The Conference Board CEI for the U.S. has been on a declining trend since November 2007, although it has also decreased at a modestly slower pace in recent months. All in all, the behavior of the composite economic indexes suggests that the economic recession that started in December 2007 will continue in the near term, but that the contraction in activity could become less severe in upcoming months.
May 19th, 2009 at 7:06 pm
Though he hasn’t attacked the Obama administration’s policies with Paul Krugman’s fury, and though he is no longer the most bearish of the bears, his short-term outlook is still quite bleak: a 36-month downturn, double-digit unemployment, and sluggish, recessionary growth well into 2010. At best.
He isn’t talking about any recovery by Dec ‘10, OL. Instead he is looking at recessionary growth well into 2010.
Prophet Motive
May 19th, 2009 at 9:40 pm
Speaking of conspiracy theories, I’ve been keeping my eyes open to see a Maya Soetero’s certificate of live birth from Hawaii, but I still haven’t seen it anywhere.
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September 24th, 2009 at 3:40 pm
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