Every day it seems we are inundated with information about new lows, reports that have never been worse and a near-depression economy. People are becoming to believe this. And as long as we do, we actually perpetuate the pain.
It's happened in the past--and it's happening now, starting with fear that gripped Americans last fall, and as I have written recently, continues today with proclamations from government officials...even at the highest office.
We are also starting to see healing across America. Some of these reports get lost among the other economic news--and it's easily lost because negative headlines always "sell" in the news media. Let's take a look at some important movements, including an update of a few that I have written about in previous articles.
The TED Spread is a common measure of fear and risk in the capital markets. When this measure declines, it is a VERY important indicator that liquidity is being restored...which was the intention of the $700 billion TARP program.
This should then be observed in an increase in consumer loans. That is happening.
We would like to see an rebound in manufacturing. The Baltic Dry Index underscores that positive movement. The index measures the demand for shipping versus the supply of dry bulk carriers.
That means we should start to see a turn around in the ISM Manufacturing Index. We're seeing a glimpse of improvement.
Yes, we have a long, long way to go yet. We appear to be on the road to recovery.
And it's easy to forget that just 10 days ago commentators were remarking about doom & gloom in our economy. Now that the stock market has rallied a bit, some people think all is OK.
It's not likely that either extreme point of view is correct.
In coming articles I'll share more of the optimistic & pessimistic viewpoints...so you can examine the breadth of thinking on this vital subject.
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