Chin Up in the Downswing

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Chin Up in the Downswing

March 10, 2009 04:30 PM
by Anne Szustek
During the deepest recession since the Great Depression, points of economic hope remain. FindingDulcinea has launched a column featuring positive economic and financial indicators.

IBM Head Sees Growth Opportunities

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IBM Chairman and CEO Samuel J. Palmisano had a positive message for shareholders on Monday. He stressed in particular IBM’s avenues for growth in “smart meter” technology, which incorporates analytic software into smaller gadgets that can gauge, as The Wall Street Journal put it, “everything from traffic management systems to food traceability products.”

Palmisano suggested that such new technologies could help to resuscitate the world economy: “Through pervasive instrumentation and interconnection … any organization, large or small—can become digitally aware, networked and intelligent,” he was quoted as saying by the Journal.

Citigroup Profitable So Far in 2009

Citigroup, the third-largest U.S. bank in terms of assets, was profitable during the first two months of 2009, CEO Vikram Pandit said on Monday in a memo to staff that Marketwatch obtained. “I am most encouraged with the strength of our business so far in 2009. … We are … having our best quarter-to-date performance since the third quarter of 2007.”

This news may help to assuage concerns over Citigroup’s solvency in light of the U.S. government raising its stake in the bank from 8 percent to approximately 36 percent on Feb. 27—the third federal intervention on the financial institution since October.

“Citigroup shares rose 27 cents, or 25.7 percent, to $1.32 in early trading” on Tuesday, reported Reuters, “after falling below $1 for the first time last week. The cost of insuring its debt against default fell from Monday's record high, indicating investors see less risk.”

Citigroup’s Good News Helps General Electric

General Electric shares also saw a strong uptick during Tuesday morning trading, largely on the back of investor confidence over Citigroup’s profitability. As of 12:08 p.m., GE’s price-per-share was $8.97, up $1.56, or more than 21 percent, from Monday’s closing bell.

A week ago GE CEO Jeffrey Immelt had admitted that his company’s public standing had been “tarnished” but acknowledged opportunity in the face of the recession, saying that the current economic conditions are allowing for the company to remake itself.

“This environment presents the opportunity of a lifetime,” Immelt was quoted as saying to Reuters. “We can participate in the changes required in the broader economy.”
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