The Good News Economist

Banks No Longer in Crisis Mode

@battman,

I don't disagree that the top banks decreased lending. (I have consistently not been an elite(top) bank fan and believe they should be split up and parceled out to the more responsible second tier solid conservative banks)

What I continue to maintain is this...
"overall business lending by *all US banks* was up 12 percent in 2008." The data is very clear on this.

GNE

Banks No Longer in Crisis Mode

@morph366,
As the opening sentence suggests, I am not implying that all is back to normal. I agree that the Fed's job is still difficult, but that doesn't mean they will not be successful.

@ paradigm1974,
Indeed almost all PR firms will concur that appropriate deliberation prior to release of good news is just as important as when then news is negative. One wrong sentence can provoke negativity even when not merited.

@Dustinian,
I too would like to see many of those top teams squirm a bit more. In fact, I'd like to see the mid tier bank execs be given the top jobs... better yet, break up the big banks and divide them up among the top banking teams that have proven the public trust.

@Gary A,
A liquid business is more likely to be solvent than a non-liquid business. However, not all businesses with liquid assets are solvent, and not all solvent businesses have strong liquidity.

@Default 1,
Even Arianna gets it right sometimes. Her quote is right on the mark whether she knows it or not. You may want to have a look at how big residential real estate market is compared to that of commercial.

@Prudent Man,
I disagree with your memory of history. Have a look at this article:
mast-economy.blogspot....
I too was around in the seventies. I really don't see this dip as any different... in fact as that article suggests there is fairly substantial evidence that our current "crisis" has much in common with other historical finance downturns in the past 800 years. (not just 30 years ago)

@mikesa69,
Thanks for reading. A closer look at my profile will reveal my name, my website and my rational for only choosing to cover the good news: the negativity is covered quite well elsewhere...

@WayneinOregon,
Thanks: one of my favorite quotes is "most economists make astrologers look respectable."

@jstratt,
I agree that bank problems still exist. IMHO, your disagreement is a matter of degree. One of the necessary outcomes of the stress tests will be some amount of objectivity in the midst of our subjective terms like "crisis"

@wholesalecd/jay,
Yes, I still "ignorantly" maintain that there really was never a "credit crisis" at *most* banks. Of the over 8000 chartered US banks the crisis was concentrated in the top 20. (A quarter of one percent)... And the total number of banks that have failed since Oct... 37 (not even one half of one percent)

Fed Beige Book Gives Markets Reason to Cheer

@beentheredonthat,

Yes indeed. Before growth can occur, contraction needs to slow. These are early indications (similar to those of past recessions) that economic contraction is bottoming.

@Mr Frain,
It is not my goal to have an effect on others' beliefs. Should it be?

Good luck,
GNE

Thoughts on a 'Recovery' Following Surprisingly Good Earnings Reports

Perhaps. But then again perhaps not. If you read the theories and works of Malcolm Galdwell (The Tipping Point, Blink, and Outliers), you will note that answering the question "How could things have gone from so bad to so good in a heartbeat?" becomes elementary.

Also check the past big bull runs that follow a prolonged bear, volume obviously takes time...and as volume and confidence builds, the rise simply becomes steeper.

6 weeks from now your miss can easily be 60%+ from the low 6 weeks ago.

For Gladwell if we reached "The Tipping Point" last month, the rally will be in full swing before we can "Blink."

Good Luck

Analyzing Consumer Sentiment: Chicago Fed Has 'Proven' Nothing

Good Day Steve,

What about investor sentiment? You may have seen that I've been following both Daily Rasmussen Consumer AND Investor Indexes quite closely in the past six weeks.

mast-economy.blogspot....

I can understand your point on decoupling spending and consumer sentiment, but I'm not sure I can completely disassociate the mood of investors whose collective optimism is continuing to rise by the day...

As of today the Investor Index is now only 3 pts below last year at this time. It's trend line in the past 6 weeks continues to much higher.

GNE

Global Markets in Review: Does the Rally Have More Steam Left?

Prieur,

Again an another enjoyable article. As I examine the last table in your article, I note that we are only off thirty-some percent year over year in several of the indexes.

If the bull move continues at the same rate as the last 5 weeks, we will be solidly in positive territory year/year.

No doubt this bull could continue to be swift and steep leaving many in the dust...

mast-economy.blogspot....

Thanks again for your balanced analysis. Enjoy the Cape!

GNE
goodnewseconomist.com

Bull or Bear? Nobody Knows

Bill,

Certainly no one knows. So I really appreciate you caution and approach to individual stocks. A great example this week is Alcoa (AA) which continues to move higher even in the face of "a miss" and a big loss.

But I'd also argue that the new bull has started. I've been following the daily Rasmussen Consumer/Investor confidence indexes closely in the past 6 weeks. They both continue to surge higher with no bearish movement since both rocketed higher 3-4 weeks ago...

mast-economy.blogspot....

No one know, but confidence is key on what might happen next. If continuing positive psychology falters, then the rallies will too.... if those indexes keep moving higher, I can't see any significant dips on the near term horizon -- individual stock picks aside, the market no doubt moves higher from here until sentiment turns south again...

GNE
goodnewseconomist.com



GNE

New Bull Market or a Bear Market Rally?

Thanks Marc,

Totally agree with Louis' points and your analysis. It is not the time to "plan to fail."

I've been following the daily Rasmussen Consumer/Investor confidence indexes closely in the past 6 weeks. They both continue to surge higher with no bearish movement since both rocketed higher 3-4 weeks ago...

mast-economy.blogspot....

If that psychology falters, then the rallies will too.... if those indexes keep moving higher, I can't see any significant dips on the near term horizon...

"Brace yourself Effie!"

Thanks again,
GNE
goodnewseconomist.com

The Tide Is Turning

Great interview Prieur,

Russell is alway so grumpy -- even in the face of an obviously improving optimistic sentiment...

This is no doubt just the first leg of the bull rally of 2009. I've been following the daily Rasmussen Consumer/Investor confidence indexes closely in the past 6 weeks. They both continue to surge higher with no bearish movement since both rocketed higher 3-4 weeks ago...

mast-economy.blogspot....

If they falter, then the rally will too.... but if they keep moving higher, I can't see any significant dips on the near term horizon...

Strong earnings from the elephants in the room this season and positive stress tests will add fuel to the rising optimism...

@_richard_,

This rally has absolutely no characteristics like a dead cat. If there is any kitten to be found right now it is attached to a bull horn.

@mkreisel,

Check the technicals on the last 12 bears as the new bull rise begins... as volume increases with confidence over time the slope higher just increases...

Good luck.

GNE
goodnewseconomist.com

Emerging Markets Lead Global Rally

Thanks Richard for these charts.

No doubt just the first leg of the new world bull. I've been following the daily Rasmussen Consumer/Investor confidence indexes closely in the past 6 weeks. They both continue to surge higher with no bearish movement since both rocketed higher 3-4 weeks ago...

mast-economy.blogspot....

If that psychology falters, then the rallies will too.... if those indexes keep moving higher, I can't see any significant dips on the near term horizon...

Thanks again for these graphs.

GNE

Stock Market Rally: Is This Just the First Leg?

I have to agree with Barton.

This is just the first leg. I've been following the daily Rasmussen Consumer/Investor confidence indexes closely in the past 6 weeks. They both continue to surge higher with no bearish movement since both rocketed higher 3-4 weeks ago...

mast-economy.blogspot....

If they falter, then the rally will too.... if they keep moving higher, I can't see any significant dips on the near term horizon...

Factory Orders Rise, Layoffs Fall

Rob,

I probably can't disassociate as you suggest unless you have data to help do that. I agree that would be tough to do.

The best of the two data points IMHO is that corporate layoffs have now decreased significantly for two months in a row. This suggests to me that business has now retooled and is ready to focus on earnings with current assets and staffing levels.

I'll be very surprised if that decrease in "rightsizing" does not translate in significant decreases in initial claims over the next 6-8 weeks.

Thanks,
GNE
goodnewseconomist.com

Factory Orders Rise, Layoffs Fall

Cautious and ED,

I understand that initial claims are up. I am not trying to be disingenuous here. I've stated multiple times that my goal is to report the silver lining, not the negative news that is already in the mainstream, well known, and reported via many many outlets.

The corporate layoff metric is reported far less albeit no doubt precedes initial claims as a leading indicator of what is happening with employment. The ISM manufacturing data on employment also matches the Challenger, Gray and Christmas metrics.

Thanks for reading and commenting.

GNE

Wednesday Headline Review: Good News Everywhere

Artful,

You are most welcome. Thanks for continuing to read and comment.

GNE

Gloom and Doom Returns to the Markets

Actually one down day does not merit the claim that "Gloom and Doom are Returning to the Markets."

In fact consumer and investor confidence continues to gain huge ground... the last two weeks look like this:
mast-economy.blogspot....

And the Rasmussen report out this morning is even better....
www.rasmussenreports.c...

Those are the best readings since Sept...